Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 18, 2019

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If the installment plan that you negotiated with the IRS is not backed by the proper legal documentation, the IRS can continue to levy and lien your property and assets. Any IRS installment plan agreement you enter into should be signed both by you and by an IRS official to ensure its validity.

An installment plan allows a debtor the opportunity to pay their debt in smaller increments when full payment is not an option. For the purposes of paying back-owed taxes, the IRS is given the authority to negotiate an IRS installment plan with a debtor and reduce overall tax debt accordingly. No installment plan is valid unless it has proper legal documentation backing it up.

Proper Legal Documentation for an IRS Installment Plan

The proper legal document for an installment plan would be a professionally drafted, signed, and dated contract. An example of the necessary wording for the contract would include: “I (your name) hereby agree that my back-owed taxes will be paid in increments of 10% each month for the next 10 months. This IRS installment plan was negotiated with (the tax agent’s name) and shall be enforced without any further actions to collect during the duration of the installment plan.” You would then both sign and date the contract and keep a copy.

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Negotiating an Installment Plan with the IRS

It is never wise to negotiate an installment plan with the IRS alone. Instead, you should contact a tax attorney who can handle both the negotiations and the contract. Your attorney will use every negotiating technique available to reduce the overall amount of owed debt in your favor. Keep in mind that any time debts are reduced and amounts forgiven, the forgiven amount must also be reported on your taxes as income. So, even though you are not paying the entire amount because of your IRS installment plan, you’ll still be responsible for the appropriate percentage of it on your next tax return.