Get help with IRS payment plan options 

The IRS offers several types of payment plans, depending on how much you owe and your financial situation:

• Short‑Term Payment Plan (180 Days): For taxpayers who can pay their balance in full within 180 days.
• Long‑Term Installment Agreement: Monthly payments over time. Options vary based on amount owed and ability to pay.
• Partial Payment Installment Agreement: Lower monthly payments based on financial hardship. You pay what you can, and the IRS may forgive the remaining balance at the end.
• Offer in Compromise: Settle your IRS debt for less than what you owe if you can’t afford to pay in full and meeting basic living expenses is a challenge.
• Currently Not Collectible (CNC): The IRS temporarily pauses collection when you truly cannot afford to pay anything right now.

Choosing the right option can save thousands, but the IRS rules are complex. Jackson Hewitt’s Tax Resolution Team specializes in evaluating each taxpayer’s unique situation and matching them with the plan that best fits their needs.

It depends on the taxpayer’s individual circumstances. The IRS does not use a single set payment amount; rather, it evaluates the balance due, the time remaining before the collection period expires, and what the taxpayer can realistically pay each month. The amount the IRS will accept is generally based on:

• Income
• Necessary living expenses
• Assets and overall ability to pay
• Total balance owed and how long the IRS has to collect

Some taxpayers qualify for full‑pay installment agreements, while others may be eligible for lower monthly payments, Partial Payment Installment Agreements, or even settling for less than the total amount owed through an Offer in Compromise.

Jackson Hewitt’s Tax Resolution Team specializes in calculating the best payment plan based on your real financial picture, that truly fits your needs.

An IRS lien and an IRS levy are two different actions, and it’s important to distinguish between them.

• An IRS lien is a legal claim against a taxpayer’s property, present and future, because of unpaid tax debt. A lien does not take money by itself.
• An IRS levy, on the other hand, is the action that actually takes funds from a bank account or garnishes wages.

So while an IRS lien does not directly remove money from a bank account, the IRS can issue a bank levy if the debt remains unresolved.

Before a levy occurs, the IRS typically sends:

• A Notice and Demand for Payment, followed by
• A Final Notice of Intent to Levy, giving the taxpayer an opportunity to resolve the balance first.

Understanding the difference between liens, levies, and the IRS collection timeline is critical. Jackson Hewitt’s Tax Resolution Team specializes in reviewing a taxpayer’s situation, determining what IRS actions may be pending, and identifying the best plan to prevent or resolve liens and levies.

The team evaluates IRS notices, balances owed, collection timelines, and available relief options to help taxpayers protect their bank accounts and choose the most effective path forward.

When the IRS freezes a bank account, it typically means a levy has been issued as part of the collection process for an outstanding tax balance. A bank levy temporarily holds the funds for a short period, generally 21 days, before the bank is required to send the money to the IRS. This hold is intended to give the taxpayer time to address the situation.

Key steps generally available during this period include:

• Reviewing the IRS notice that triggered the levy to understand the balance owed and the IRS’s reason for taking action.
• Determining eligibility for a payment arrangement, such as an installment agreement or other resolution option, which may allow the levy to be released.
• Evaluating financial hardship, as the IRS may release a levy if it creates an immediate economic hardship that prevents meeting basic living expenses.
• Confirming whether the levy was issued in error, such as for a balance already paid or while another resolution was in progress.

IRS levies follow strict timelines and rules, and the 21‑day hold period is often the critical window for taking action. Jackson Hewitt’s Tax Resolution Team specializes in analyzing the taxpayer’s financial situation, IRS notices, and collection status to determine the most effective path toward releasing a levy and preventing future actions.

The team identifies relief options, communicates with the IRS on the taxpayer’s behalf, and works to find the solution that best fits the taxpayer’s needs.

The time the IRS allows for paying a tax balance depends on the taxpayer’s situation and the type of agreement approved. The IRS may allow:

• Up to 180 days to pay the full balance through a short‑term payment plan.
• Monthly payments over an extended period through a long‑term installment agreement, often lasting several years.
• Longer‑term arrangements, such as a Partial Payment Installment Agreement, when full payment is not possible based on the taxpayer’s financial condition.
• Settlement for less than the total owed through an Offer in Compromise if paying the full balance would create financial hardship.

The IRS generally allows payments for as long as the collection statute remains open, typically up to 10 years from the date the tax was assessed, though the exact timeline varies based on the taxpayer’s circumstances and the agreement type.

Determining how long the IRS will allow for repayment requires understanding the IRS’s rules, financial standards, and collection timelines. Jackson Hewitt’s Tax Resolution Team evaluates income, expenses, assets, and the remaining collection period to identify the most manageable payment option and the timeline that best fits the taxpayer’s situation.

The team works directly with the IRS to secure the most favorable resolution available.

The IRS does not set a single universal minimum monthly payment. Instead, the required payment amount depends on:

• The total balance owed
• The taxpayer’s income and necessary living expenses
• The time remaining on the IRS’s 10‑year collection period
• The type of payment plan requested.

While payment amounts differ by situation, the IRS generally follows these guidelines:

• Some taxpayers may qualify to pay nothing each month. In cases of financial hardship, the IRS may place the account in Currently Not Collectible (CNC) status, where no monthly payment is required.
• For taxpayers who qualify for a payment plan based on financial hardship, the lowest monthly payment the IRS will typically allow is $25.
• Other taxpayers may have higher minimum payments, depending on:
  • Total balance due
  • Verified income and necessary living expenses
  • Available assets
  • The remaining time the IRS has to collect the tax

Because each taxpayer’s financial profile is different, the minimum acceptable payment amount can vary widely from one case to another.

Determining the lowest monthly payment the IRS will accept requires an understanding of IRS financial standards and collection rules. Jackson Hewitt’s Tax Resolution Team specializes in reviewing each taxpayer’s income, expenses, assets, and collection timelines to identify the most affordable payment plan. Or, when appropriate, a hardship option that requires no monthly payment at all.

The team works directly with the IRS to secure the most manageable resolution available.

The level of difficulty depends on the amount owed, the type of agreement requested, and the taxpayer’s financial circumstances.

In general:

• Balances under $10,000 often qualify for a simplified agreement with minimal requirements.
• Balances under $50,000 can usually be approved through a streamlined installment agreement without submitting detailed financial information.
• Higher balances or financial hardship situations may require a full financial review, including documentation of income, expenses, and assets, which can make the process more complex.
• If a taxpayer cannot afford the IRS-calculated payment amount, approval may require additional steps, such as proving financial hardship, requesting a Partial Payment Installment Agreement, or exploring other resolution options.

The IRS uses strict financial standards and collection rules when evaluating payment plans. Jackson Hewitt’s Tax Resolution Team specializes in determining which type of plan a taxpayer qualifies for and preparing the information the IRS requires.