REPRESENTATION BEFORE THE IRS
These tax tips are intended solely for general educational purposes. They are not intended for the
purpose of providing specific legal, accounting, tax, or other professional advice to any particular
recipient. The author, publisher, and distributor of this document (1) make no representations,
warranties, or guarantees as to its technical accuracy or compliance with any law; and, (2) assume no
responsibility to any recipient of this document to correct or update its contents for any reason, including
changes in any law. If you seek specific professional tax advice, you should retain the services of a
Certified Public Accountant, Enrolled Agent, or attorney authorized to represent taxpayers before the IRS.
A 20 minute phone consultation with James C. Wangerin, CPA is available for $49.95.
PARTIAL PAYMENT OPTION
A partial payment installment agreement allows you to pay installments less than the
amount required to pay the debt in full.
The IRS charges interest and penalties on the unpaid portion of the debt.
The IRS charges $52 for direct debit agreements and $105 for non-direct debit
agreements to set up the agreement.
If you total income is less than $26,000 plus $9,000 for each additional member of your
family you can qualify for a set up fee of $43. See Form 13844.
If you don't meet the terms of the agreement throughout the life of the agreement, the
IRS charges an additional fee of $45 to reinstate it.
You will be encouraged to pay by electronic transfers from your bank account or other
The Failure to Pay Penalty is calculated at one-half of one percent of the tax owed for
each month, or part of a month, that the tax remains unpaid after the due date, not
exceeding 25 percent. The one-half of one percent rate increases to one percent if the
tax remains unpaid after several bills have been sent to you and the IRS issues a notice
of intent to levy. Beginning January 1, 2000, if you filed a timely return and are paying
your tax pursuant to an installment agreement, the penalty is one-quarter of one
percent for each month, or part of a month, that the installment agreement is in effect.
Interest, compounded daily, is charged on any unpaid tax from the due date of the
return until the date of payment. The interest rate is the federal short-term rate plus 3
percent. That rate is determined every three months.