If you owe money to the IRS, it can be stressful to think about how you`re going to pay it all back. Luckily, the IRS offers installment agreements that can help you pay off your debt over time. However, if you have an installment agreement with the IRS, it`s important to know that they may periodically review your account to ensure that you`re following the terms of the agreement.
What is an installment agreement?
An installment agreement is a payment plan that allows you to pay off your tax debt over time. If you owe less than $50,000 in taxes, penalties, and interest, you can apply for an installment agreement online. Once you`ve applied, the IRS will review your application and may ask for additional information, such as your monthly income and expenses. If your application is approved, you`ll be able to make monthly payments until your debt is paid off.
What is a periodic review?
When you have an installment agreement with the IRS, they will periodically review your account to ensure that you`re making your payments on time and in full. This review is called a “periodic review.” The purpose of the review is to ensure that the terms of your agreement are being met. During the review, the IRS will look at your financial situation and may ask for updated financial information.
What happens during a periodic review?
During a periodic review, the IRS may ask for updated financial information, such as your income and expenses. They may also ask for proof of any changes in your financial situation, such as a change in income or a new job. If the IRS determines that you`re not able to make your payments, they may modify your agreement or terminate it altogether.
How can you prepare for a periodic review?
To prepare for a periodic review, it`s important to keep accurate records of your payments and to make your payments on time and in full. You should also keep track of any changes in your financial situation and be prepared to provide updated financial information if requested. If you`re having trouble making your payments or if your financial situation has changed significantly, it`s important to contact the IRS as soon as possible to discuss your options.
In conclusion, if you have an installment agreement with the IRS, it`s important to be aware of the periodic review process. By keeping accurate records of your payments and being prepared to provide updated financial information, you can help ensure that your agreement remains in good standing. If you have any questions or concerns about your agreement or the periodic review process, don`t hesitate to contact the IRS for assistance.