Form 9465-FS, also known as the Installment Agreement Request, is used by individuals who are unable to pay their tax liability in full to request a monthly payment plan from the Internal Revenue Service (IRS). Here are some relevant points regarding when you may need to complete Form 9465-FS:
1. Inability to pay tax liability in full: If you find yourself in a situation where you are unable to pay your tax liability in full by the due date, you may need to consider submitting Form 9465-FS. This form allows you to establish a monthly installment plan to pay off your tax debt over a period of time.
2. Payment plan eligibility: To be eligible for an installment agreement, you must owe $50,000 or less in combined individual income tax, penalties, and interest, and be current with all tax filings. If you owe more than $50,000, you may still qualify but will need to provide additional financial information to the IRS.
3. Prioritizing other means before applying: The IRS encourages taxpayers to consider all other available options before applying for an installment agreement. This includes using savings, borrowing from friends or family, or obtaining a loan from a financial institution, as these alternatives may have lower interest rates or fees compared to an IRS payment plan.
4. Timely submission of Form 9465-FS: It is important to submit Form 9465-FS as soon as possible if you believe you need an installment agreement. Filing your request promptly can help avoid additional penalties and interest that accrue on the outstanding tax liability.
5. Choosing the right payment amount and timeline: When completing Form 9465-FS, you will need to propose a specific monthly payment amount and a term for the installment agreement. It is essential to carefully calculate and analyze your financial situation to ensure you can meet those payment obligations without creating further financial strain.
6. Online payment agreement option: The IRS provides an online payment agreement tool on their website which can be used to request an installment agreement. This tool offers a convenient and streamlined process for individuals who meet certain criteria to set up a payment plan without having to file a paper form.
Remember, it is always advisable to consult with a tax professional or seek guidance from the IRS directly to determine whether Form 9465-FS is appropriate for your specific tax situation.