Can I Add Tax Owed to Existing Installment Agreement

If you owe taxes to the IRS, an installment agreement may be the best way to pay off the debt over time. However, what happens if you still owe taxes while on an existing installment agreement? Can you add the new tax debt to the agreement? In this article, we will explore all the relevant information to answer these questions.

First things first, let`s understand what an installment agreement is? An installment agreement is an agreement between the taxpayer and the IRS to pay off their tax debt in monthly payments over a set period of time. Typically, the IRS requires a taxpayer to pay off their tax debt within 72 months or less through an installment agreement.

Now, coming to the question at hand, « Can I add tax owed to existing installment agreement? » The answer is yes. The IRS allows taxpayers to add new tax debt to their existing installment agreement. This process is known as « restructuring » or « modifying » the installment agreement.

However, there are some requirements that taxpayers need to meet before they can add new tax debt to their existing installment agreement. The primary requirement is that the taxpayer must be current on all their installment payments.

The IRS allows taxpayers to add new tax debt as long as the monthly payment amount for the existing installment agreement is enough to cover the additional tax debt. Essentially, the monthly payment will increase to accommodate the new debt amount.

The taxpayer will need to file a separate request for a new installment agreement to add new tax debt. This can be done online through the IRS`s Online Payment Agreement application or by submitting Form 9465, Installment Agreement Request, to the IRS.

It is important to note that adding new tax debt to an existing installment agreement can incur additional fees and interest, which will be added to the original debt amount owed. Therefore, taxpayers should make sure they can afford the increased monthly payments before adding new tax debt to their existing installment agreement.

In conclusion, taxpayers who are on an existing installment agreement and still owe taxes have the option to add new tax debt to their agreement. However, they must meet certain requirements, and the monthly payment amount must be enough to cover the additional tax debt. If you are struggling to pay off your tax debt, consult with a tax professional to explore your options.