Tax Defense ✦ Payment Plans
A Payment Plan You Can Actually Keep.
Most tax debt is resolved with an installment agreement or a hardship determination, not a dramatic settlement. The trick is getting terms you can live with and a structure that doesn’t produce a new balance next April. North Star Law Firm negotiates IRS and Colorado payment plans for a flat fee and builds the compliance plan that keeps them from defaulting.
Overview
Three ways to resolve a balance you can’t pay at once
The IRS has a menu. A streamlined installment agreement needs no financial disclosure and spreads a balance over up to 72 months. A non-streamlined or partial-payment agreement is negotiated from a financial statement and can run for the life of the collection statute, sometimes paying only a fraction of the balance. Currently-not-collectible status suspends collection entirely for taxpayers in hardship. Choosing among them is a computation on the same Form 433 that decides an offer in compromise, and the choice affects whether a lien is filed, whether penalties keep accruing, and whether part of the balance expires unpaid.
- Streamlined agreements set up without a financial statement
- Partial-payment agreements negotiated from a CPA-prepared Form 433
- Currently-not-collectible status documented and obtained
- Lien consequences managed within the agreement structure
- Colorado DOR payment plans negotiated alongside
- Defaulted agreements reinstated
- Collection statute expiration dates computed and used
- Estimated payments and withholding fixed so the plan holds
Comparison
Which resolution fits which situation
| Resolution | Best for | Financial statement? | Lien? | Balance paid |
|---|---|---|---|---|
| Streamlined installment agreement | Balances under about $50,000 that can be paid in 72 months | No | Usually not, with direct debit | In full, with interest and penalties continuing |
| Non-streamlined agreement | Larger balances or longer terms | Yes (Form 433) | Usually filed | In full over the agreed term |
| Partial-payment installment agreement | Taxpayers who can pay something but not everything before the statute expires | Yes, reviewed every two years | Usually filed | Partially; the rest expires with the statute |
| Currently not collectible | Taxpayers whose allowable expenses meet or exceed income | Yes | Often filed | Nothing while in status; balance may expire |
| Colorado DOR plan | Assessed state balances | Sometimes | Often filed | In full over a shorter term with a down payment |
The Attorney-CPA Difference
The plan that fails is the one that ignored next year.
Installment agreements default for one reason more than any other: the taxpayer owes again the following year. Self-employed Coloradans without withholding, S corporation owners without reasonable salary, and rental owners with depreciation recapture all produce new balances that break the plan. We fix the source while we negotiate the plan: estimated payments, withholding, entity structure, and bookkeeping that shows the tax before it is due.
- Form 433 prepared to IRS Colorado expense standards
- Statute expiration used to shape partial-payment terms
- Current-year estimates set at the same time
- Lien filing avoided or withdrawn where the rules allow
- Colorado plan coordinated so the two payments are affordable together
Questions & Answers
Installment Agreements & CNC questions, answered
Which IRS payment plan applies to me?
It depends on the balance. Under about $50,000 (individuals) you can generally set up a streamlined agreement over 72 months with no financial statement. Above that, or if you need a longer term, the IRS requires Form 433 and computes what you can pay from the expense standards. A partial-payment installment agreement pays less than the full balance over the remaining collection statute and is often the best outcome for someone who doesn’t qualify for an offer.
What is currently-not-collectible status?
A determination that you cannot pay anything without hardship. Collection stops, no payments are due, and the 10-year collection statute keeps running, so some balances expire without ever being paid. The IRS reviews CNC accounts periodically and can reinstate collection if your income rises. It is a legitimate resolution, not a trick, and it is the right answer for more people than realize it.
Does Colorado offer payment plans?
Yes. The Department of Revenue sets up payment plans through Revenue Online or its collections section, generally requiring a down payment and monthly payments over a defined term, and it may file a lien while the plan is in effect. Colorado’s plans are less flexible than the IRS’s, so we usually resolve the state balance on a shorter schedule and the federal one on the longer one.
Will the IRS file a lien if I’m on a payment plan?
For streamlined agreements under $50,000 paid by direct debit, generally not, and an existing lien can be withdrawn once the direct-debit agreement is in place and the balance is under $25,000. For larger balances the IRS usually files. We structure the agreement with the lien consequence in view.
I’m self-employed and always behind on estimates. Can I still get a plan?
Yes, but the plan will fail unless the current year is handled. The IRS requires you to stay current on estimated payments while on an installment agreement, and a new balance defaults it. As a CPA practice we set the estimates and, where useful, adjust the entity structure so the current year stops producing a new debt.
Talk to an attorney-CPA before you talk to the IRS.
A free consultation, a plain-English assessment, and a flat fee in writing if you decide to move forward.