Here’s what you need to know about the Business IRS Payment Plans. Notice of Deficiency Before you start down the path to choosing and applying for a business IRS payment plan, the agency will send you a notice of deficiency. If you don’t think the IRS has determined your tax responsibility correctly, you can petition the US Tax Court within 9- days of the notice’s original date to dispute the charges. There are several different types of notices of deficiency, all of which denote a discrepancy in what you think your business owes in taxes (reported on your tax returns) versus what the IRS has calculated as your tax responsibility. Once you’ve determined the notice of deficiency is legitimate and accurate, it might be time to set up a payment plan in order to divvy out what you owe without having to pay it all in one lump sum. What is an IRS Payment Plan? The Business IRS Payment Plans are tax payment plans that help businesses pay their back taxes. It doesn’t stop penalties and interest charges, but you can qualify to apply online if you are looking for a long-term payment plan. You just need to have filed all your required returns and owe $25,000 or less in combined taxes, penalties, and interest, according to the IRS. The only difference would be if your business is a sole proprietorship or you are an independent contractor, in which case you will need to apply for the tax payment plan as an individual. What Does It Cost? If you choose the long-term payment plan, most often called an “installment agreement,” there is a $31 online setup fee (set up via phone or other methods may have higher associated fees and then you will pay monthly via DDIA (Direct Debit Installment Agreement) automatic withdrawals from the business checking account that you provide. You can also go the non-direct debit route. It costs $130 to set up and then you can pay your monthly bill through a variety of means, including paying electronically (online), by phone, …
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