IRS Payment Plan Checklist
Use this checklist before you provide financial information to the IRS and before you request a Monthly Installment Agreement.
1. Are any tax returns (or other required IRS filings) past due? If so, these must be filed before the IRS will consider an Installment Agreement.
2. Have you determined the Collection Statute Expiration Date?
3. Can you borrow money to pay off the tax debt in full? This is recommended for two reasons: 1) you should get a better interest rate from a private lender; and 2) you should be able to avoid an IRS tax lien which can greatly damage your credit.
Form 433A or 433F
1. Have you included your spouse’s or co-habitee’s income on the IRS financial statement (required even if the tax debt is only yours)?
2. Have you included only the “quick sale” value of your assets on the IRS financial statements? Quick sale value is defined as the net amount you would receive if you were had to sell your property quickly.
3. Have you answered truthfully Question 16 on Page 3 regarding transfers of property in the last 10 years for less than full value? Have you answered truthfully Question 8 on page 1 regarding anticipated increases or decreases in your income?
5. Have you included all of your assets on the financial statement, including any cash not held in banks, cash or property others are holding for you and the contents of any safe-deposit box?
6. Have you consulted the IRS National and Local Standards as a guide to computing your necessary living expenses?
7. Have you obtained your last six months bank statements (for all bank accounts in your name or in your name jointly with someone else), including legible copies of cancelled checks?
8. Have you assembled, copied and organized receipts and other documents to support both the stated values of your assets, the payoff amount of your debts and your income and necessary living expenses?
9. Have you had an experienced accountant or CPA review your financial statement before submitting it to the IRS?
The Installment Payment Agreement Request
1. Have you prepared a transmittal cover letter listing the items you are enclosing with the request for an Installment Payment Agreement?
2. Have you clearly marked as Exhibits the supporting documentation included with your financial statement submissions?
3. Have you made copies of all your supporting documentation and retained the originals? (Never send an original document to the IRS and always make sure you retain a complete copy of anything you send to them)
4. Are you sure you will be able to pay the monthly payment amount you are proposing? (If you make more than one late payment, the IRS will default the Installment Agreement and begin enforced collection action)