Settle Tax Debt with PPIA

There are instances that a person will face difficulties regarding the payment of his taxes. Eventually, his debt would soon accumulate to the point wherein it is almost impossible to repay all of these.

However, there are many ways that a person can resolve and settle tax debt. One of which is through Partial Payment Installment Agreement (PPIA).

What Is Partial Payment Installment Agreement

One way that a person can resolve tax debt issues is through Partial Payment Installment. It allows the person to partly pay his Internal Revenue Service tax debt through several payments over a certain period. This kind of agreement obliges full disclosure of a person’s financial information such as total income, assets and liabilities with the use of Form 433-A.

The IA must be carried out if a person can verify financially that he is not capable of fully paying back his taxes. Once he has no other choice to pay back his taxes, then to settle tax debt through PPIA may be considered by the agency.

To be precise, generally the IRS will have to trade any asset a person has to compensate for tax debts. The person’s monthly payment is determined by the person’s Collection Information Statement 433, which informs the IRS of the person’s financial capability.

As part of the process to settle IRS tax debt, it is also very important to note that this type of agreement results to the taxpayer paying smaller since the Statute of Collection terminates on each period, that part of an individual’s tax debt becomes noncollectable. Usually the Statute of Collections period is ten years starting the day the taxes were evaluated.

To be able to comply with Partial Payment Installment Statement, a person has to comply with the following requirements:

1. To settle tax debt, the IRS taxes from previous years should have been reported and disbursed.
2. Over $10,000 in combined IRS tax debt, penalties and interest.
3. The Collection Information Statement, also known as Form 433-A
4. 9465 – Installment Agreement Request
5. Cannot be in Bankruptcy or had an Offer in Compromise (OIC) accepted.
6. Should have had complied with payments in the past with the IRS.
7. No IRS Installment agreement in the last 5 years in order to settle tax debt.
8. Canceled Check, credit card, or bank information.
9. If possible, three years of financial documentation.

Additionally, before deciding to take for PPIA, an individual must first consult a debt specialist to assist him with this process as it can be pretty complicated. Nevertheless, it is one of the most efficient methods to settle tax debt.