Whether it is called an IRS Installment Agreement, Payment Agreement, Payment Option or an IRS Payment Plan, the idea is the same — Berkshire Tax Resolution explains that you make payments on the tax you owe and you do so over time. That is if you can. That sounds like a good deal, but Berkshire Tax Resolution advises you not to assume that an IRS Payment Plan or Agreement is your best option. Interest and penalties continue to accrue even while you still owe and are paying. When you combine the penalties, the interest rate is often 8% to 10% per year. Berkshire Tax Resolution would like you to know that you can save more money by paying the full amount you owe as quickly as possible to minimize any interest and penalties.  
 
For those who cannot resolve their tax debt immediately, however, Berkshire Tax Resolution points out that an Installment Agreement can be a reasonable payment option. Installment Agreements and Payment Plans allow for the full payment of the tax debt in smaller, more manageable amounts, clarifies Berkshire Tax Resolution.  
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Internal Revenue Code (IRC) Section 6159 provides the authority for the Internal Revenue Service to accept an installment agreement that results in full or partial satisfaction of the tax liability. Berkshire Tax Resolution explains that this partial payment installment agreement requires a mandatory review of partial payment installment agreement every two years for agreements entered into on or after October 22, 2004.  
 
Berkshire Tax Resolution would like you to be aware that there are two types of partial payment installment agreements:  
 
No Asset/No Equity – Berkshire Tax Resolution sheds light on the fact that, under this partial payment installment agreement, the taxpayer has no assets and/or no equity in assets or the taxpayer has liquidated available assets to make a partial payment.  
 
Asset/Equity – Berkshire Tax Resolution would like to make it known that, under this partial payment installment agreement, the taxpayer has minimal equity, is unable to utilize equity, or is unable to sell the asset because it is unmarketable despite a high book value, or the asset is necessary to generate income for the partial payment installment agreement, and the government will receive more from the future income generated by the asset than from the sale of the asset, explains Berkshire Tax Resolution.  
 
Whenever a taxpayer owes more than $25,000, it is best to request that the taxpayer’s case be transferred to a Revenue Officer.  
 
In most cases, the Automated Collection System (ACS) does not retain a taxpayer’s case for an indefinite period of time. Berkshire Tax Resolution understands that, if the ACS knows a source from which funds can be obtained by the issuance of a levy, then a levy will be served if the taxpayer does not contact the ACS timely. Berkshire Tax Resolution elaborates by stating that levy sources include bank accounts and employers.  
 
If your financial situation does not allow you to pay off your taxes in full, the IRS will review the circumstances that caused you not to pay your initial taxes and allow you to set up an Installment Agreement, explains Berkshire Tax Resolution. With an Installment Agreement you can pay off your tax liability over a set time period with a monthly installment that you can afford.