Overview

Taxpayers who owe more than $25,000 to the IRS may qualify for a Conditional Installment Agreement. Like other types of installment agreements, this allows you to pay off tax debt over time in amounts that are realistic for your situation. Here’s how this husband-wife duo were able to bounce back from $180,000 in tax debt.

Situation

Despite being fully compliant with their tax return filings, Mike and Terry, a married couple with two kids in Los Angeles County, CA, were confronted with an outstanding balance of $180,000 from the previous 3 years.

Solution

Because of their combined monthly income of $20,000 along with their equity in assets, the couple qualified for a Conditional Installment Agreement (CIA). With this solution, Mike and Terry were able to arrange a direct debit (ACH bank) payment plan of $2,500 per month.

Result

The resolution went smoothly, with the entire process taking only 2.5 months. This included 3 weeks for IRS negotiations and 7 weeks for setting up the direct debit Conditional Installment Agreement for Mike and Terry. In this case, since the balance owed exceeded $25,000, this became a Conditional Installment Agreement instead of a Streamlined Installment Agreement (SIA).