Taxpayers with tax to pay may qualify to enter into an instalment arrangement with the Internal Revenue Service.
The IRS can grant individuals up to 72 months to pay in the following situations:
- income tax of US $25000 or less is owed, or
- the individual is responsible for a Trust Fund Recovery Penalty, or
- the individual was self-employed and is no longer operating the business, or
- the individual is responsible for a partnership liability arising out of a partnership that is no longer operating.
In some cases, the IRS must agree to an instalment arrangement. Where the tax is less than US$10,000, the past five years’ returns have been timely filed, no prior agreement has been entered into with the IRS, and the IRS determines the taxpayer cannot, in fact, pay the tax owed in full, the IRS must grant the arrangement which allows the taxpayer to pay the full amount within 3 years.