May 21, 2008

Q & A: Installment Agreement Deferment

QUESTION: I have an installment agreement set up with the IRS and was recently laid off from my employer. Will the IRS allow me to defer payments until I secure another job? If so, what is the process to facilitate that request?
In addition, will I still receive a stimulus payment or will that be automatically applied to the debt I owe them?

ANSWER: Great questions. The IRS will not allow you to defer payments on your agreement based solely on losing your job. But if you are unemployed and have no sources of income, you can contact the IRS at 1-800-829-7650. Explain your situation to them and request to be put into a Currently Non-Collectible Status. If this status is approved, it will allow you some relief from installment payments until you find employment and are able to continue payments.
Your stimulus rebate will be withheld by the IRS and applied to your outstanding tax liability.

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