Can You Have 2 Installment Agreements With the IRS?

Installment agreements can help you manage IRS tax debt. But if you have multiple or complex debt, can you have more than one agreement? Our tax team explores the answer to this question and more below.

Do you have tax debt? Are you considering a payment plan? Contact Innovative Tax Relief for a free debt consultation. We can help you manage your tax debt and take control of your financial future.

What Is an Installment Agreement?

An installment agreement is a payment plan with the IRS. You can set up an installment agreement if you have tax debt that you are unable to pay in full.

Installment agreements with the IRS can help you avoid more serious consequences of tax debt, including:

• Fines and penalties
• Tax levies
• Federal tax liens

How Do Installment Agreements Work?

The goal is always to pay your tax obligations in full. However, installment agreements give you “breathing space” and allow you to pay back tax over time. They are suitable if you think you can pay your tax in full, but you need an extended timeframe to do so.

If you can’t pay your tax bill, even with extra time, then you should consider a different type of payment option. We will touch on these below.

No matter which type of installment agreement you have, they usually work as follows.

• You apply online and request a payment plan.
• The IRS notifies you whether you have been approved.
• If approved, you pay in monthly installments (normally by direct debit).
• If you default on payments, the IRS could take enforcement action, such as levies or tax liens.

Types of IRS Installment Agreements

There are various tax payment options available. Which one you qualify for depends on your circumstances. The most common options are:

• Short-term payment plans: For debts of $100,000 or less which can be paid within a short timeframe i.e. within 180 days.
• Long-term payment plans: Suitable for debts under $100,000, but the taxpayer needs up to 72 months to repay the debt. These are the most common types of payment plans.

Who Qualifies for an Installment Agreement?

Most US taxpayers qualify to apply for an installment agreement. However, this does not automatically mean that your request will be approved. You must meet certain criteria for approval.

For example, you’re less likely to be approved if you have defaulted on payment plans before. And the IRS may require seeing certain financial information before they can approve you. Our team can help you understand installment agreement acceptance criteria before you apply.

How Do I Request a Payment Plan?

Should you wish to apply for a payment plan, you can normally do so online. Or you can apply by phone. You will need personal details such as bank account information to set up a direct debit. You will also need to show photo ID.

In most cases, you’ll need to know the balance on your most recent tax return, too.

Can You Have Two Payment Plans With the IRS?

So, can you have multiple payment plans with the IRS?

The short answer is no. You can only have one payment plan for tax debt with the IRS at any one time. It doesn’t matter if you have new tax debt. You can still only have one installment plan for your entire debt.

When might you have 2 installment agreements with the IRS? Typically, there’s only one scenario where this could happen. That’s when you have tax debt in two separate capacities: personal and business.

Say you have personal and business tax debt. You could have an installment agreement for your personal debt and your corporation debt. Or you might have two payment plans for two separate, unrelated businesses.

But to be clear, you can’t have two payment plans for personal tax debt.

What if I Can’t Pay My Installment Agreement?

First, don’t panic. Under the Taxpayer Bill of Rights, you deserve to be treated fairly. This includes when you’re struggling to pay your tax debt. If you can’t pay, you have a few options.

• Currently not collectible: For taxpayers who cannot pay anything at all towards their tax bill. The debt doesn’t disappear. But the IRS won’t attempt to collect it until you have the means to start paying the tax debt.
• Offer in compromise: An offer in compromise means settling a tax debt for less than the full amount owed. It may be suitable for genuine financial hardship situations. You pay what you can, and the IRS writes off the extra debt.
• Propose a revised amount: You may be able to request payment of a different monthly amount. You can do this online through your account. If the IRS rejects your offer, you can file a Form 433-F. This is an opportunity to show why you need to pay a reduced amount.

To better understand your options, contact our team before contacting the IRS. We can help you determine the best course of action. We can even approach the IRS on your behalf.

Can I Amend an Existing Installment Agreement?

Usually, the answer is yes. You may be able to amend an installment agreement if:

• You can pay more towards your tax debt
• You need to adjust your monthly payments
• There is a change of bank account or other personal details

What if I Have More Than One Tax Debt?

It’s not uncommon for tax debt to accrue over time. And although you can’t have multiple IRS payment plans, you can ask to consolidate the debt into one plan. This means you pay off more than one tax debt through the same payment scheme.

The IRS may not approve your request; however, our team can explain what debt relief options you might have.

Tax Debt Solutions from Innovative Tax Relief

If you have tax debt, you might feel overwhelmed about how to manage the situation. The best option for paying your taxes depends on your unique financial circumstances. And that’s where we can help.

Innovative Tax Relief provides bespoke, creative solutions to tax debt for businesses and individuals. Whether you need IRS representation or help with back taxes, we’re here for you. If you have a payment plan, we can help you amend your installments. Or we can negotiate with the IRS to keep payments manageable.

Take control of your financial future. Learn how to break free from tax debt. Contact Innovative Tax Relief for a free initial consultation on your tax debt.