An installment agree may be an option for a Taxpayer if the Taxpayer is unable to pay their tax debit in full when the tax is due. This option allows the Taxpayer to pay the tax debt over a longer period of time. Payment agreements are allowed on any type of tax including employment taxes.
The downside of an installment agreement is penalties and interest still accrue until the entire debt is paid in full. Taxpayers are required by law to pay interest on the tax debt until the debt is paid in full. In many cases The Tax Law Pros can get the penalties removed.
Taxpayers are expected to immediately pay in full the delinquent tax liabilities. If full payment is not possible by the Collection Statute Expiration Date (CSED), and the taxpayer has some ability to pay, IRS can enter into a Partial Payment Installment Agreement (PPIA).
Taxpayer's assets must be addressed and, if appropriate, sold to make payment towards the tax liability before the Partial Payment Installment Agreement may be accepted.