Non-Streamlined Installment Agreement

A non-streamlined installment agreement is a type of payment plan agreement that allows taxpayers to repay their tax debts over time in installments. While it can be a helpful option for those who cannot afford to pay their taxes in full immediately, it is important to understand its limitations and requirements.

One major drawback of a non-streamlined installment agreement is that it is not as streamlined or straightforward as a streamlined installment agreement. This means that there is a larger amount of paperwork, documentation, and information required to apply and qualify for the agreement. Additionally, the processing time for a non-streamlined agreement can take longer than a streamlined agreement, as the IRS will need to review the application and determine eligibility.

Another requirement of a non-streamlined installment agreement is that taxpayers will need to make a down payment towards their tax debt, typically around 20% of the total amount owed. This can be a significant financial burden for some taxpayers, especially if they were already struggling to pay their taxes in full upfront.

In order to qualify for a non-streamlined agreement, taxpayers must also demonstrate that they have the ability to pay their taxes over time. This may involve providing financial statements, such as bank statements or wage statements, to prove their income and expenses. Additionally, taxpayers must be willing to commit to monthly payments, which may require a review of their budget and financial situation.

It is important to note that a non-streamlined installment agreement does not eliminate any interest or penalties on the tax debt. The IRS will continue to charge interest and penalties until the tax debt is fully paid off, which can make the total amount owed significantly higher.

Despite its limitations, a non-streamlined installment agreement can be a helpful option for individuals who are unable to pay their taxes in full upfront. It can also be a viable alternative to other forms of collection action, such as wage garnishment or bank levies. However, it is crucial to carefully consider the requirements and limitations of this type of agreement before applying, to ensure that it is the best option for your individual financial situation.

In summary, a non-streamlined installment agreement can provide taxpayers with a feasible payment plan option to pay off their taxes over time. However, it is important to fully understand the requirements and limitations of this agreement before proceeding with an application. As always, seeking the guidance of a tax professional can be helpful in navigating the complexities of tax debt repayment.