After you arrange an IRS Payment Plan, you MUST pay at least the agreed upon payment each month. You can’t pay ahead and then skip a month. However, you can always pay more each, or any month to pay it off sooner if you so desire. This a great way to fix your difficulty on your own; while saving the money you’d pay a professional, and the worry that you just paid a professional that is going to rip you off. It happens all the time. The IRS (along with Federal and State agencies) has shut down several VERY LARGE 800 number chains that have been ripping off people for years. I believe in large part, that the new rules were set up to help individuals take care of their own tax problem without having to risk being fleeced by one of these unethical businesses. Unfortunately there are MANY. Be careful.
All that said; there are many reasons why you may want to hire a professional when arranging an IRS Installment Plan. I have sat down and explained the IRS rules to 1000s of people so they could fix it themselves and not pay us (Advanced Tax Solutions, CPA, PC) if it isn’t necessary. However, the following are some guidelines you may want to consider before forging ahead on your own, as you don’t want to be unaware of the pitfalls that could apply before giving the IRS your bank account and employment information.
One of the first things the IRS will ask after opening your account on the computer system and determining the amount due while you are on the phone is where do you work and where do you bank. Now, this information isn’t being asked so they can send you a thank you card. They want to get this information in case you do not arrange an IRS Payment Plan. They can and will send a letter to your bank telling the bank to send the government ALL the money that is in there. The bank, by law, has to do it.
Next, the IRS can send your employer a letter stating you will only be allowed to keep a small portion of your check. The employer MUST send the rest to the IRS each and every payday until the IRS is paid (or until you arrange an IRS Payment Plan – obviously, at this point, the IRS is in the driver’s seat). If you are self-employed, it can even be worse, but that is another story. The point of all this is that it’s IMPERATIVE, that when you call, you get a solution set up. You do not want to give the IRS such damning information and then fail to get a solution. There are many pitfalls that I see taxpayers fall into, but are easily avoidable if you just know what the rules are.