Will the IRS reinstate a reinstalment agreement? My husband and I owe back taxes from 2016 And we had set up a payment plan with the IRS?

To do automatic drafts. We were late getting our payment out to the IRS for 2017 but they were paid in full. I called the IRS the other day to make sure the payment posted correctly to the account and it was properly credited. The representative on the phone told me that if you have a payment plan for back taxes and are late getting out a payment to the IRS regardless of of whether the account was paid in full for the prior year that it can affect the current payment plan. Now I have to reset up a whole Nother payment plan. Will they allow this? I don’t want my accounts to be levied. My husband and I are not rich we are barely making it for what they take

5 Answers

  • 2 years ago

    They will, but expect the monthly payments to be higher or expect them to issue a lock in letter to your employer - this means that the IRS chooses how your W4 is set up, not you. They force your employer to withhold a certain amount.

  • NA
    Lv 7
    2 years ago

    The deadline for full paying 2017 was 4/15/2018. If you had an extension to file, the IRS wouldn't know until you filed 2017 that you owed money for it. This can cause the installment agreement to default.

    Yes, you can reinstate the installment agreement (and alas, there is a fee). During set up, the IRS will want to know that you have taken corrective actions for 2018 so it won't default again.

    Note, it's possible to reinstate multiple times, but each additional time, the IRS is going to look at why it keeps happening and at some point will not reinstate without you submitting a full financial statement.

  • 2 years ago

    The FORMER plan no longer exists. Whether or not you can negotiate for the same payments depends on things you did not, and should not, post here. I ABSOLUTELY CERTAIN that any new agreement will require TRUE automatic payments, as in the only way they don't get paid on time is if there are not sufficient funds in the account. If a payment isn't received on time, you WILL NOT get a 3rd chance.

  • 2 years ago

    What he said is familiar with what I am familiar with too. If you fail to honor your agreement, the agreement is void. They can levy your account or they can agree to allow you catch up the following month and continue paying monthly - it is up to them. They can also put you in jail for tax evasion. What are they "likely" to do? It depends on a number of things - how much you owe, why you failed to pay, whether you tried to get away with not paying - in other words, without knowing your circumstances, I can't guess what they will do. A tax attorney can probably help you but, it sounds like you can't afford an attorney either.

    Source(s): Certified Paralegal, with 25+ years' experience.
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  • 2 years ago

    The existing plan can be reinstated.

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