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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 agreements that 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 liability with the IRS, in certain circumstances they will let you break that up into payments and call it an installment agreement. An installment agreement is actually a term of art, a fancy lawyer phrase or IRS phrase in this case, that means a payment plan. There are three types, and I'm going to briefly go over them here. The type that most people want to hear about right now is called the streamlined installment agreement, and it's under the fresh start initiative. If you owe $50,000 or less to the IRS under most circumstances and can pay off that amount within 72 months, the IRS will break it up into small enough payments so that you can get it paid off in six years. The second type of installment agreement is what I call a classic installment agreement. This applies if you owe more than $50,000 or if you've defaulted on installment agreements in the past. You're pretty much stuck with the classic installment agreement. The IRS looks at your financial situation using either a form 433-F or a form 433-A and a 433-B if you have a business or if you're self-employed. They determine, using their allowable expense standards, how much you can afford to pay on your installment agreement payment. This usually doesn't turn out particularly well because their allowable expense categories are absolutely ridiculous. You could end up in a situation where you owe $100,000 to the government, you make $10,000 a month, but they want you to pay $7,000 or $8,000 a month toward that obligation. That's obviously...