Introduction
If you owe money to the Internal Revenue Service (IRS), you may be wondering how long you have to make installment payments. The good news is that the IRS offers several options for taxpayers who are unable to pay their taxes in full at the time they are due. In this article, we’ll explore the different installment payment plans available and how long you can make payments.
Short-Term Payment Plan
If you owe $100,000 or less in combined tax, penalties, and interest, you may be eligible for a short-term payment plan. This plan allows you to pay off your debt in full within 120 days. There is no fee to set up a short-term payment plan, but interest and penalties will continue to accrue until the debt is paid in full.
Long-Term Payment Plan
If you are unable to pay your debt in full within 120 days, you may be eligible for a long-term payment plan. The most common long-term payment plan is the installment agreement. This plan allows you to make monthly payments over a period of up to 72 months (6 years).
Partial Payment Installment Agreement
If you are unable to make the payments required under a standard installment agreement, you may be eligible for a partial payment installment agreement. This plan allows you to make smaller monthly payments over a longer period of time, typically up to 84 months (7 years).
Offer in Compromise
If you are unable to pay your debt in full and you meet certain eligibility requirements, you may be able to settle your tax debt for less than the full amount owed through an offer in compromise. This option is generally reserved for taxpayers who are experiencing financial hardship or who have no reasonable way to pay their debt in full.
Bankruptcy
In some cases, bankruptcy may be a viable option for taxpayers who are unable to pay their tax debt. However, bankruptcy should be considered a last resort because it can have long-lasting consequences for your credit and financial future.
Conclusion
If you are unable to pay your taxes in full, there are several options available to you. The length of time you have to make installment payments will depend on the specific plan you choose. It’s important to remember that interest and penalties will continue to accrue until your debt is paid in full, so it’s in your best interest to pay off your debt as soon as possible. If you’re unsure which payment plan is right for you, consult with a tax professional or contact the IRS directly for guidance.