180 day extension full payment for balances more than 50K

Home Forums Installment Agreements 180 day extension full payment for balances more than 50K

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    Peter Mitchell

    I continue to deal with clients owing more than $50K. When requesting an installment agreement for balances more than $50K, the IRS states it will automatically file a federal tax lien. That can obviously be detrimental to the taxpayer for many reasons.

    I discovered a 180 day extension full payment option for taxpayers owing more than $50K. This option gives the taxpayer 180 days to pay the balance below $50K in order to set up an installment agreement AND avoid a federal tax lien. Also, IRS collection activity is suspended during the 180 days.

    This has been useful for me in quite a few cases, especially where we agree with the balance owed and the taxpayer is able to pay down the balance below $50K within the 180 day period.

    Once requested, the IRS will send a letter stating the terms of the 180 day extension full payment.

    P.S. I haven’t been able to find the IRM section covering this procedure but it has been verified by multiple IRS representatives.

    Ira Levine

    Thank you for this information

    Eric Green

    Peter, per IR 2020-248 they changed the procedure and extended the short term IA from 120 days to 180 days. The IRS is now reviewing the cases and determining if this will be a permanent change or if they will change it back to the original 120 days. Stay Tuned.

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