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New form allows taxpayers to ask for installment plan when they file.

New form 9465 (IR-93-2,5, 3/3/93) allows taxpayers unable to pay their taxes in full to ask the IRS for an installment payment agreement. In the past, taxpayers could not ask for installment agreements until the return had been filed and a bill had been issued by the IRS.

Now form 9465 can be submitted with the return, and the IRS will issue a decision on the request within 30 days. Any installment plan will, of course, be subject to late-payment penalties and 7% interest (the rate the IRS currently charges on back taxes).

The new procedure is part of an IRS effort to help taxpayers resolve their payment problems. As of the end of last year, 1.5 million taxpayers were paying $5.6 billion in taxes through monthly installment plans, which lasted an average of 14 months.

The IRS also made other related changes:

* All IRS offices can now approve agreements involving $10,000 or less. Previously, only the Collection Division could, approve accounts over $5,000.

* Taxpayers no longer need to complete financial statements for accounts under $10,000.

* As long as no financial statement is required and the taxpayer sticks to the payment schedule, the IRS will not file a lien.
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:May 1, 1993
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