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IRS ANNOUNCES STREAMLINED MONTHLY PAYMENT PLANS

 WASHINGTON, March 4 /PRNewswire/ -- You've finished your tax return, and the bottom line is you own money -- more than you can afford to pay right away. What should you do? You should consider asking the Internal Revenue Service for an installment payment agreement. This year, the IRS even has a new request form to make the process easier than before.
 Taxpayers who cannot pay their bills in full can fill out Form 9465, "Installment Agreement Request," and send it to the IRS. Taxpayers can now request payment agreements when they file by just attaching the request forms to their balance due returns. In the past, taxpayers could not request payment agreements until they had filed and received bills from the IRS. Taxpayers can expect to get a decision back from the IRS within 30 days.
 The IRS said that it changed its procedures as part of its overall strategy to help taxpayers resolve payment problems quickly and easily. Allowing taxpayers to request a payment plan at the time they file their tax returns removes inability to pay as a potential reason for not filing.
 The IRS cautioned that monthly payment plans may not be the best choice for all taxpayers. Taxpayers who make monthly payments are still liable for interest and a late payment penalty of one-half percent a month on any unpaid amounts. When this penalty is added to the current 7 percent interest rate, the cost to taxpayers who enter into payment agreements is an annual rate of 13 percent on their unpaid balances.
 Before requesting an installment agreement, taxpayers should consider other, less costly alternatives. Taxpayers may be able to obtain loans at banks or other lenders with more favorable rates. If taxpayers do decide to request installment agreements, they should pay as much with the return as possible -- thereby reducing any interest and penalties due.
 In addition to allowing taxpayers to request installment agreements at the time of filing, the IRS has made several other improvements to installment agreement procedures:
 -- All offices within the IRS can now approve agreements up to $10,000. Before this change, only collection division could work accounts over $5,000.
 -- For accounts under $10,000, the IRS no longer requires taxpayers to complete financial statements.
 -- If the IRS does not require a financial statement and the taxpayer adheres to the payment schedule, the IRS will not file a federal tax lien.
 Taxpayers requesting an installment agreement when they file their tax returns should attach the completed Form 9465 to the top of their tax returns. Form 9465 is available by calling the IRS toll-free at 800-TAX-FORM.
 At the end of fiscal year 1992 there were 1.5 million taxpayers paying back $5.6 billion through monthly payment plans. According to the IRS, the average length of these plans was 14 months.
 -0- 3/4/93
 /CONTACT: Rosemary Campbell, public affairs officer of the Internal Revenue Service Denver District, 303-446-1650/


CO: Internal Revenue Service Denver District ST: Colorado IN: FIN SU:

JB-LS -- DV007 -- 3205 03/04/93 17:54 EST
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Date:Mar 4, 1993
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