Guaranteed Installment Agreement

IRS Definition

Internal Revenue Code (IRC) section 6159(c) requires the IRS to accept proposals of installment agreements under certain circumstances. In accordance with the tax laws the IRS must accept proposals to pay in installments if taxpayers are individuals who:

  • owe income tax only of $10,000 or less (excluding penalties and interest);
  • have not failed to file any income tax returns or to pay any tax shown on such returns during any of the preceding five taxable years;
  • cannot pay the tax immediately;
  • agree to fully pay the tax liability within 3 years;
  • agree to file and pay all tax returns during the term of the agreement; and
  • have not entered into an installment agreement during any of the preceding five taxable years.

More about guaranteed installment agreements from H&R Block

If you meet the criteria listed above for a guaranteed installment agreement, the IRS must accept your request for a payment plan.

In this case, the IRS typically doesn’t file a federal tax lien. If you don’t qualify for the guaranteed installment agreement because you can’t pay your tax balance within three years, but you can pay it within six years, you may still qualify for a streamlined installment agreement and avoid a federal tax lien filing.

Learn all the options you may have if you can’t pay your taxes.

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