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How IRS Interest is Calculated

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You are required to file a return if you have earned income in the previous year. You are also required to pay all tax by the due date to avoid IRS interest and penalty charges. The official due date to file and pay taxes is April 15. This is the “deadline for most people to file their individual income tax return and pay any tax owed” (IRS.gov, “Topic 653 – IRS Notices and Bills, Penalties and Interest Charges,” 7/26/2013). All U.S. tax returns are checked for mathematical accuracy. In the event that you owe money to the IRS, you will be sent a bill. With this in mind, familiarize yourself with the different types of penalties and IRS interest charged to your tax balance as well as the procedures and methods used to calculate interest and penalties.

Key Takeaways

  • You are required to file a return if you have earned income in the previous year. You are also required to pay all tax by the due date to avoid IRS interest and penalty charges. The official due date to file and pay taxes is April 15.
  • For example, there is an IRS interest charge on the unpaid tax. Unpaid tax is determined by the balance due from the date of the return to the date of payment (“Topic 653”).
  • It is important to note that the one-half of one percent rate will increase to one percent when the tax is unpaid for 10 days; and this is the time maximum for after the IRS issues a notice of intent to levy.

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How to Fight a Wage Levy

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Fighting a wage levy involves taking the steps necessary to ensure your assets are protected. However, when there is an outstanding tax liability for which you are responsible and when you do not satisfy the debt, the IRS will pursue action that may involve attaching an interest in your paycheck. With this in mind, a wage levy is a legal seizure of property to satisfy a debt. If you do not pay your taxes, the IRS may seize and sell any type of property belonging to you to satisfy the tax liability.

Key Takeaways

  • Fighting a wage levy involves taking the steps necessary to ensure your assets are protected.
  • The process for attaching an interest to your wages is three-part.
  • With all of this in mind, when it comes to wage levies, the most important strategy for avoiding the levy is to pay the taxes owed. When the IRS sends a Notice and Demand for Payment, respond to that notice with a payment.

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Can I Make Payments to the IRS?

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IRS audit defense guide — Brotman Law

Many people who are not able to pay their tax payments immediately ask the question “Can I make payments to the IRS?” The answer is yes; however, paying your full tax debt will save you the set up fees and reduce or eliminate penalty costs. If you have another source, such as a credit card or loan, you could save money by paying your entire tax bill. If you have no other options, IRS installment agreements are a great way to help you avoid default.

Key Takeaways

  • Many people who are not able to pay their tax payments immediately ask the question “Can I make payments to the IRS?” The answer is yes; however, paying your full tax debt will save you the set up fees and reduce or eliminate penalty costs.
  • Prior to applying for installment agreement, you must file all of the required tax returns. Determine the amount you are able to pay each month. There is a minimum monthly installment requirement of $25.
  • You also want to know “Can I make payments to the IRS to avoid default with the IRS?” If you understand your IRS installment agreement, you will be able to avoid default.

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IRS Tax Lien Release – Part Three – Release and Subordination

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Continued from IRS Tax Lien Release – Part Two – Lien Withdrawal

Key Takeaways

  • Second to getting the IRS to withdraw the lien entirely, you want to make sure that you get a tax lien release from the IRS. A tax lien release will still appear on a taxpayer’s credit, but the lien will be shown as paid and not have as adverse an effect.
  • Finally, it the IRS will not agree to tax lien withdrawal or tax lien release entirely, a lien subordination is a third option for dealing with an IRS lien.
  • In conclusion, IRS tax liens are problematic for taxpayers and are best dealt with sooner rather than later. That said, if a lien has been placed on your property there are a number of options for resolving the issue.

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IRS Tax Lien Release – Part Two – Lien Withdrawal

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Continued from IRS Tax Lien Release – Part One – Avoiding a Lien

Key Takeaways

  • Once the IRS tax lien is in place, it generally will not release it unless the balance owed is paid in full or there is another justification for removing it (such as it was filed erroneously or is for a year that is no longer subject to collections).
  • Lien withdrawal is one remedy that taxpayers can seek from the IRS. If possible, you want to try to get liens withdrawn than simply released or subordinated.
  • Additionally, taxpayers can get a lien withdrawn after the fact by entering into a direct debit installment agreement with the IRS.

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IRS Tax Lien Release – Part One – Avoiding a Lien

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Introduction to IRS Tax Lien Release

One of the biggest debates in the tax practitioner community is the efficacy of IRS tax liens. On one hand, IRS tax liens help the government protect its interest in a taxpayer’s property and secure the underlying tax obligation with real or tangible personal property. On the other hand, liens damage a taxpayer’s credit, place an obstacle in the way of the taxpayer selling that property or borrowing against it in order to pay off their liability, and generally do nothing to satisfy the immediate concern of the IRS. Furthermore, it is extremely difficult to get a lien release and liens are a noted hassle to dispose of once they have been filed against a taxpayer. However, there are a number of things that the taxpayer can do if they are affected by a federal tax lien in order to secure a lien release or achieve some other workable solution that allows them to make progress on the account. After all, the IRS is simply seeking a workable resolution to the problem.

Key Takeaways

  • One of the biggest debates in the tax practitioner community is the efficacy of IRS tax liens.
  • First of all, although it may go without saying, the easiest way to not have to worry about federal tax liens is to not get them in the first place. Being compliant with your federal tax obligations is a one hundred percent guaranteed way to avoid a tax lien.
  • Along those lines, the IRS generally does not go through the trouble of placing a lien on taxpayers who owe smaller liabilities.

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Tax Payment Plan Criteria: How to Get Approved

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Getting approved for an IRS payment plan is mostly a math question: owe $50,000 or less (tax, penalties, and interest combined) with all returns filed, and you can generally set up a plan online with up to 72 months to pay — no financial disclosure, approval is effectively automatic. Owe more than $50,000, need lower payments than the formula allows, or have unfiled returns, and approval turns on a Form 433 financial statement and negotiation with the IRS. Setup fees run $31–$225 by application method; our full breakdown of IRS installment agreement types covers the details, and if the balance is large, tax debt resolution counsel can usually do better than the default terms.

By Sam Brotman, JD, LLM, MBA · Last updated July 2026

If a payment plan is only one of the options on your table, a tax debt attorney can tell you whether an offer, abatement, or the collection statute serves you better.

Introduction to Tax Payment Plans

When an individual cannot pay the full balance owed to the IRS, one of the most common solutions is to get that taxpayer set up on a tax payment plan. However, payment plans are not a matter of right, and taxpayers must meet several requirements in order to get their tax payment plan approved. It is important that to be aware of these criteria, as making sure you have met all of the requirements in advance will help expedite the approval of your IRS payment plan.

Key Takeaways

  • First, the IRS does not prefer that taxpayers finance their tax obligations.
  • These time frames can also vary based on the size of your liability.
  • Furthermore, the IRS will require that the taxpayer is up to date on all current year payments and has filed all outstanding returns.

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Tax Levies and Property Exempt IRS Levy

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Introduction to Tax Levies

The IRS can be fairly aggressive when it comes to adverse collection action. The IRS uses certain tactics to usher taxpayer compliance and to reduce the size of balances that are owed on taxpayer accounts. Tax levies are one of these collection tactics. The general rule with tax levies is that the IRS can levy all property that belongs to the taxpayer in order to satisfy the outstanding obligation. However, certain property is exempt from an IRS levy and cannot be seized by the IRS.[1]

Key Takeaways

  • The IRS can be fairly aggressive when it comes to adverse collection action. The IRS uses certain tactics to usher taxpayer compliance and to reduce the size of balances that are owed on taxpayer accounts. Tax levies are one of these collection tactics.
  • This list of property is codified under Internal Revenue Code (IRC) § 6334.
  • 2. Personal items, personal care items, fuel, furniture, and personal effects.

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Payment Plans: Partial Pay Installment Agreements

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Introduction to Partial Payment Plans

The IRS expects that taxpayer will pay any back taxes that are owed in full at the time that they are due or will get on a payment plan for the amount in question. However, the IRS does not like to wait long for funds and payment plans are generally granted only in circumstances where the taxpayer can set up a payment plan to pay the balance owed, plus applicable penalties and interest within five years or prior to the expiration of the Collection Statute Expiration Date (CSED), whichever is first. However, there are some instances where this is not possible and the IRS is forced to consider the alternative. In these instances, the IRS will sometimes consider a partial payment plan for the taxpayer.

Key Takeaways

  • The IRS expects that taxpayer will pay any back taxes that are owed in full at the time that they are due or will get on a payment plan for the amount in question.
  • Partial payment plans and the IRS’s authority to consider them is a fairly recent development. The IRS was not previously able to consider partial payment plans and instead would just resort to adverse collection measures.
  • All that considered, partial payment plans are difficult to come by based on the fact that the IRS is essentially giving up on collecting the full balance owed.

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IRS Payment Plan Requests – Form 9465-FS

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Introduction to IRS Payment Plans and Form 9465-FS

There are numerous options available to a taxpayer trying to resolve a balance due with the IRS.[1] One of the more prevalent options is to work out an IRS payment plan to pay down the liability in installment payments. When a taxpayer sets up a payment plan, they agree to make a specified monthly payment over a set period of time based on their ability to pay (as calculated by the IRS). In exchange for the taxpayer entering into their IRS payment plan, the IRS agrees to hold off on any adverse collection activity, including wage garnishments or bank levies, for the life of the installment agreement. Taxpayers can make a request for a IRS payment plan by filing IRS Form 9465-FS with the IRS.

Key Takeaways

  • There are numerous options available to a taxpayer trying to resolve a balance due with the IRS.
  • Form 9465-FS is only appropriate in certain circumstances and I have some practical advice for you in filing out the form that will maximize success in obtaining a successful IRS payment plan.
  • Second, it is a good idea to have an idea of what an acceptable IRS payment plan proposal is for your own planning purposes.

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