Payment Plans: How IRS Installment Agreements Work and When They Make Sense
What This Video Covers
Owing money to the IRS is stressful — but it is not a dead end. In this video, our attorneys walk through the range of tax debt relief options available to individuals and businesses who owe back taxes, penalties or interest.
Key topics addressed include:
- What happens when you fall behind on taxes
- The difference between an installment agreement and an Offer in Compromise
- When Currently Not Collectible status may apply
- How penalty abatement works and who qualifies
- What the IRS Fresh Start Program offers
- The role of a tax attorney in negotiating on your behalf
Why This Matters
The key is understanding which option fits your financial situation and presenting your case to the IRS in the strongest possible way. That is what our attorneys are trained to do.
Hello there. My name is Benjamin Goldburd, and I am the prettiest tax lawyer you know.
Today, we are going to be discussing an oldie but a goodie. The IRS is known for having a “naughty list,” a “dirty dozen list,” that they have compiled to warn taxpayers of the scams and flimflam they hate. But today, in under two minutes, I’m going to explain the oldest one on the books, because it’s been around for very, very long. And that is OIC Mills: Offer In Compromise Mills. Alright, two minutes on the clock, and let’s go forth.
The Offer In Compromise program is something that allows taxpayers to settle with the IRS for less than they owe. Now, something like this is only allowable in certain instances, and not all taxpayers qualify. The reason being that the IRS can wait you out until you are able to pay it out in full. So, therefore, payment plans are the preferred method for the IRS versus wiping out debts completely, though it’s not impossible.
But, there are unscrupulous—I know that’s a big word—mills that actually try to convince people to come up with wild and sometimes false information in order to get settlements from the IRS. And, in the end, those settlements can either take the form of settlements that don’t work and will be called to question later, or even give percentages of those settlements back to the mills so that when you are caught, you are stuck literally with your pants down.
So, be careful when dealing with the Offer In Compromise “pennies on the dollar” idea or sales pitch because you should really go to a real tax professional to take a look at that so that you don’t end up on the IRS’s very, very naughty list.
About the Presenter
Benjamin A. Goldburd, Esq.
Goldburd McCone LLP
Benjamin brings focused experience in IRS collection defense, including lien and levy disputes, CDP hearings and negotiated resolutions. Our team’s combined backgrounds in accounting, business and wealth management ensure that enforcement responses account for the full scope of a client’s financial position.
Frequently Asked Questions About Tax Debt Relief
What is an Offer in Compromise?
An Offer in Compromise allows qualifying taxpayers to settle their tax debt for less than the full amount owed. The IRS evaluates your ability to pay, income, expenses and asset equity. Not everyone qualifies, and the application process is detailed — but for taxpayers who meet the criteria, it can provide significant relief.
What if I cannot afford to pay anything right now?
You may qualify for Currently Not Collectible status, which temporarily suspends IRS collection activity while your financial situation is documented. This does not eliminate the debt, but it can stop levies and garnishments while you get back on your feet.
Can penalties be removed?
In many cases, yes. The IRS offers penalty abatement for taxpayers who have a history of compliance and can demonstrate reasonable cause for falling behind. First-time penalty abatement is one option — your attorney can evaluate whether you qualify and file the request on your behalf.
What is the IRS Fresh Start Program?
The Fresh Start Program expanded the IRS’s installment agreement and Offer in Compromise programs to make them accessible to more taxpayers. It raised the threshold for streamlined installment agreements and modified the formula for evaluating Offers. It is not a one-size-fits-all solution, but it has helped many taxpayers establish manageable repayment terms.
Should I use a tax relief company I see advertised?
Be cautious. Many tax relief companies promise results they cannot deliver, charge large upfront fees and have limited accountability. Working with a licensed tax attorney provides legal protections — including attorney-client privilege — that these companies cannot offer. If a company guarantees a specific outcome before reviewing your case, that is a red flag.