Video instructions and help with filling out and completing Which Form 4797 Installment

Instructions and Help about Which Form 4797 Installment

Hey there are three types of installment agreement so you can make with the IRS what is an installment agreement well an installment agreement is simply a payment plan if you cannot afford to pay your full balance or your full liability with the IRS in certain circumstances they will let you break that up into payments and they call that an installment agreement an installment agreement is actually a term of art it's a fancy lawyer phrase or IRS phrase in this case that means a payment plan and there's three types i'm going to go over those three briefly here the type that most people want to hear about right now is what's called the it's under the fresh start initiative it's actually called a streamlined installment agreement if you owe $50,000 or less to the IRS under most circumstances and you can full pay that obligation within 72 months the IRS is going to go ahead and break that up into small enough payments so that you can get that thing paid off in six years the second type of installment agreement is what I call a classic installment agreement and it goes like this with you owe more than fifty thousand dollars or if you've defaulted on installment agreements in the past you're pretty much stuck with what I call the classic installment agreement the IRS looks at your financial situation using either a form for 33 f or a form for 33 a and a 433 be if you have a business or if you're self-employed and they determine using their allowable expense standards how much you can afford to pay on your installment agreement payment and it usually doesn't turn out particularly well and that's because their allowable expense categories are absolutely ridiculous so you could end up in a situation where you a hundred thousand dollars to the government you make ten thousand dollars a month but they want you to pay seven or eight thousand dollars a month toward that obligation and that's obviously not a win-win for anybody you're not going to be able to make those payments and the government is going to have to redo this installment agreement in the future because it just isn't going to work the third kind of installment agreement is a little bit harder to explain it's called a partial pay installment agreement and it requires that I explain something called the collection statute of limitations first see those about all of us as taxpayers have a ten-year statute of limitations and order in which to pay back our tax obligations to the government what does that really mean in English well here's what it means if you file a tax return and you have a liability that you owe the IRS the IRS only gets 10 years to collect that money now there are things that can toll that time which means stop it and there's actually things that can add more time to that 10 years but generally speaking we all have 10 years to pay that back but if you come in for example to our office and you're looking for help with your IRS tax problem and you owe seventy thousand dollars and you have three years left to pay there's probably it's probably not very likely you're going to be able to pay that seventy thousand dollars back in that three years remaining now in the old days the IRS would actually coerce taxpayers and assign an extension of the collection statute for five more years and thankfully they really don't do that anymore that almost never even asked for those extensions any morning I don't believe there are hardly any circumstances when you would want to sign such an extension but the good news is like I said they're not really asking for those anymore so back to my scenario partial pay installment agreement you know seventy thousand dollars you only have three years left on the collection statute what are we going to do well the IRS is going to look at your collection information statement here for 33 f your 433 a your 433 be if you're self-employed small business owner and they're going to term determine how much you can afford to pay so let's say in our scenario you can only afford to pay using their Stanners three hundred dollars a month and there's 36 months left on the statute that means you would simply pay three hundred dollars x 36 and I don't have the map in front of me but somewhere around ten thousand dollars over that three years instead of the 70 so that's really a pretty good deal but you really need some professional help in order to calculate that collection statute how much time you have left and help you through this process now there's one catch and one kicker and a partial pay installment agreement and that is that you actually cannot have any assets in excess of your monthly disposable income so if you have equity in a house like being in car things like that then the IRS is not going to put you into a partial pay installment agreement they're going to look for your equity in that asset so those are the three installment agreement types you got what i call the classic installment agreement the streamlined installment agreement and the partial pay installment agreement if you have questions about this or really anything else pertaining to IRS tax problems I invite you to visit our website at get IRS help calm