Hi all.
This is a question regarding the IRS Installment Plan to pay any taxes owed.
Question????
Justin and Kendra are in the process of entering into an installment agreement with the IRS for their outstanding tax liability. Upon discussing the installment agreement with the revenue officer or the IRS, they are informed that the IRS will be placing a tax lien on their home. Can the IRS do this if there is an installment agreement in place?
Answer: Yes, an installment agreement will not prevent a lien from being placed on the taxpayer’s assets. When a taxpayer enters into an installment agreement, a tax lien may be filed encumbering the taxpayer's property, the taxpayer will be required to extend the statute of limitations on assessment, the statute of limitations will be suspended during any appeal of a rejection or termination of the agreement and the taxpayer will waive any rights to refunds. The lien will remain in effect until the installment agreement is paid. An installment agreement nevertheless has the benefit of giving the taxpayer additional time to pay the full liability, rather than requiring the taxpayer to make immediate payment, and the benefit of a reduced delinquent payment penalty.
The Internal Revenue Manual states: “Installment Agreements are arrangements whereby the Internal Revenue Service allows taxpayers to pay liabilities over time. The only agreements that may be granted are those that provide for full payment of the accounts that are part of the agreements. During the course of agreements, penalty and interest continue to accrue. No levies may be served during installment agreements.” IRM 5.14.1.1 Securing Installment Agreements–Overview (Sept. 30, 2004).
We Will try and get question like this for you to view every week.
Franklin Katz, ATP, PA, PB,
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039 Fax: (704) 739-3934
e-mail: [email protected]
Web Site: File Your Return Online
Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
I mispelled item in the heading
This is a question regarding the IRS Installment Plan to pay any taxes owed.
Question????
Justin and Kendra are in the process of entering into an installment agreement with the IRS for their outstanding tax liability. Upon discussing the installment agreement with the revenue officer or the IRS, they are informed that the IRS will be placing a tax lien on their home. Can the IRS do this if there is an installment agreement in place?
Answer: Yes, an installment agreement will not prevent a lien from being placed on the taxpayer’s assets. When a taxpayer enters into an installment agreement, a tax lien may be filed encumbering the taxpayer's property, the taxpayer will be required to extend the statute of limitations on assessment, the statute of limitations will be suspended during any appeal of a rejection or termination of the agreement and the taxpayer will waive any rights to refunds. The lien will remain in effect until the installment agreement is paid. An installment agreement nevertheless has the benefit of giving the taxpayer additional time to pay the full liability, rather than requiring the taxpayer to make immediate payment, and the benefit of a reduced delinquent payment penalty.
The Internal Revenue Manual states: “Installment Agreements are arrangements whereby the Internal Revenue Service allows taxpayers to pay liabilities over time. The only agreements that may be granted are those that provide for full payment of the accounts that are part of the agreements. During the course of agreements, penalty and interest continue to accrue. No levies may be served during installment agreements.” IRM 5.14.1.1 Securing Installment Agreements–Overview (Sept. 30, 2004).
We Will try and get question like this for you to view every week.
Franklin Katz, ATP, PA, PB,
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039 Fax: (704) 739-3934
e-mail: [email protected]
Web Site: File Your Return Online
Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
I mispelled item in the heading