If you owe back taxes to the IRS, you may have entered into an installment agreement with them to make payments over time. This can be a helpful option if you`re unable to pay off your tax debt in full. However, you may be wondering if you have to pay on time every single month or if you can skip a payment here and there. Let`s take a closer look at the requirements of an IRS installment agreement.
First, it`s important to note that an IRS installment agreement is a legally binding contract between you and the government. Once you`ve agreed to the terms, you`re responsible for making payments on time each month until your tax debt is paid off. If you miss even one payment, you`ll be considered in default of the agreement and the IRS can start taking collection actions against you.
So, to answer the question: yes, you do have to pay your IRS installment agreement on time each month. If you`re unable to make a payment, you should contact the IRS as soon as possible to discuss your options. They may be able to offer a temporary delay or even modify your agreement to better suit your financial situation.
It`s also worth noting that interest and penalties will continue to accrue on your tax debt while you`re on an installment agreement. This means that the longer you take to pay off the debt, the more you`ll owe in total. To avoid this, try to pay off your agreement as quickly as possible.
In addition to making payments on time, there are a few other things to keep in mind while on an IRS installment agreement. You should always file your tax returns on time, even if you can`t pay the full amount owed. Failing to file can result in additional penalties and interest charges. You should also notify the IRS if your contact information changes, such as if you move or get a new phone number.
In conclusion, if you`re on an IRS installment agreement, it`s important to make payments on time each month. Skipping a payment can result in default of the agreement and collection actions by the IRS. If you`re unable to make a payment, contact the IRS to discuss your options. And remember, interest and penalties will continue to accrue while you`re on an installment agreement, so try to pay off the debt as quickly as possible.