Monthly Installment Agreements with IRS May Need to be Modified Amid Coronavirus Pandemic
With the U.S. economy being crippled by the mandatory shutdowns triggered by the coronavirus pandemic, many Americans have been or will be laid off or experience lower income in the months to come. If you are in this group and are currently making monthly installment payments to the IRS you may want to renegotiate your current IRS installment agreement to lower your monthly payment.
First of all, your current monthly installment payment was likely set based on your monthly income and expenses at the time your IRS installment agreement was established. If your financial situation has now changed for the worse your payment amount is no longer appropriate and can be lowered. After all, the IRS cannot force you to pay more than you have available each month after you have paid certain necessary living expenses. Of course, for purposes of calculating an individual’s “monthly available income” the IRS does limit or cap certain monthly living expenses such as mortgage payments and vehicle loan payments. In the event you have no funds available after paying your monthly living expenses (subject to IRS financial standards) you can be placed in “currently not collectible” status, which means that your monthly installment payments will be suspended until such time as the IRS deems you capable of making monthly installment payments again (usually 1-2 years later).
If you are currently having difficulty making your monthly IRS installment payment due to a recent loss of income, give us a call to discuss a possible reduction of your monthly payment.