Qualifying Factors of Tax Debt Resolution Payment Plans

Last updated on January 17, 2023

Every tax debt payment plan has qualifying factors that must be met by the applicant to begin the resolution process under it. The IRS has various tax debt payment plans, such as Streamlined Installment Agreement, Currently Not Collectible, Offer in Compromise, Partial Payment Installment Agreement, and Guaranteed Installment Agreement that taxpayers can apply for.

A taxpayer’s ability to pay the tax debt and the amount of taxes owed are major considerations for qualifying for a tax debt payment plan. For example, only the taxpayers that can qualify for Offer in Compromise are those who do not have the financial strength to pay the full amount of tax debt. The IRS considers both assets and income, along with the ability to take out a loan, when judging the ability to pay the tax debt.

Taxpayers must, therefore, only apply for a payment plan that they can hope to qualify for. To discourage taxpayers from applying for tax reduction plans and other attractive payment plans, the IRS charges penalties to those applicants that clearly are not eligible to qualify for a payment plan.

It is beneficial to hire a tax resolution company for the resolution of a case if it requires representation and negotiation. Hiring professional help becomes essential for tax debt cases that require tax debt reduction or postponement for their resolution. Taxpayers may find our ratings and review of the top tax resolution services helpful in judging the competency of a tax resolution company.