Pay Big, Save Big. The Shocking Truth about IRS Installment Agreements

Installment Agreements allow a taxpayer that owes the IRS to repay the debt in a set amount of monthly payments. Installment Agreements are the most commonly used IRS payment method. And the IRS doesn't mind, considering how much more money this can make them at your expense. Read on if you want to learn the shocking truth about IRS Installment Agreements

Wasting Money Paying the IRS monthly with an Installment Agreement will start to feel like taking two steps forward and one step back. That's because the interest and penalties on your Tax Debt continue to accrue every month!

What are my options? If there's no other option, the Installment Agreement does allow you to repay your debt over a period of time with monthly payments. But you have to realize it's costing you plenty in interest and penalties. So what other options are out there?

Paying in Full- Most people absolutely can't pay in full, but if you're one of the luck few that can borrow from friends, family or the bank to get this thing taken care of...what are you waiting for? You could save thousands by paying in Full!

Credit Card- If the interest rate on your credit card is significantly lower then the IRS payments, and your limit is high enough, use your credit card to pay the IRS debt. It's easier to work with your creditors that with the IRS. Unlike the IRS, your creditors are unlikely to levy your bank account or issue a tax lien. But remember, if you settle with your creditors, the IRS will count the amount you saved as "income." A dirty trick, but they get away with it!

Offer in Compromise- Few people will qualify for an Offer in Compromise. But if you meet any of the following three qualifications, you might be considered for an Offer.

• Unable to Pay: If it's impossible to repay your debt in full before the 10 year statute of limitations runs out, you might be considered for an Offer. The IRS will closely examine your ability to pay, even taking factors like age and healthy into consideration.
• Doubt at to Liability: If you're not liable for the debt, you qualify. Be prepared to prove how you're not liable for the tax debt assessed.
• Hardship: If a sudden financial hardship is preventing you from working (ex: sudden serious illness, handicapped) you will be considered for an Offer.

The Offer in Compromise program will lower the amount owed, saving you big bucks. This also takes care of the debt in one swift move.

Currently Not Collectible- The IRS might give you a temporary, or permanent reprieve from collection actions, depending on the severity of your hardship situation. If you can't pay, you can't pay.

Seeking Help Now you know an Installment Agreement is not the only option for repaying your tax debt. If it's not working, consider consulting with a tax resolution professional to see if any of the options above are right for you.