The Internal Revenue Service has introduced several new features to the interactive Online Payment Agreement application which will make it easier for taxpayers and their authorized representatives to make changes to existing installment agreements.
The system will now permit:
Individuals to revise their payment due dates and/or amounts on existing agreements.
Individuals to revise existing extensions to regular installment agreements and direct debit installment agreements.
Individuals to revise existing regular installment agreements to a payroll deduction installment agreement or a direct debit installment agreement.
Practitioners with valid authorizations to use the signature date found on their approved Form 2848, Power of Attorney and Declaration of Representative, or the caller ID as an alternate way to authenticate when requesting agreements for clients.
More than 75 percent of those eligible for an installment agreement can establish one using the online application, according to the IRS. Since launching in October 2006, more than 30,000 taxpayers have successfully used it to set up a payment agreement.
Eligible taxpayers who owe $25,000 or less in combined tax, penalties, and interest can self-qualify, apply, and receive immediate notification of approval for installment agreements – including pre-assessed agreements on tax year 2007 Form 1040 liabilities and paperless direct debit agreements.
Paying taxes on time and in full avoids unnecessary penalties and interest. However, taxpayers who cannot pay in full may request a payment agreement. To be eligible, a taxpayer must first file all required tax returns and be current with estimated tax payments, if applicable.