What if I do not qualify for an installment agreement?

If for some reason you don’t qualify for an installment agreement, there are other options available to you.

What are some of the reasons why you wouldn’t qualify for an installment agreement?

One of the reasons might be that your monthly income is exactly the same as or less than your monthly allowable expenses, in which case you really have no ability to pay and the IRS will not give you an installment agreement.

Another reason that you might not qualify for an installment agreement is you have significant equity in assets and the IRS is going to ask you to either cash in some of those assets or to borrow against those assets.

Those are two things that come to mind immediately as to why you would not receive an installment agreement.

But if you don’t receive an installment agreement, other options are available and all is not lost.

One of the things that you can qualify for is what’s called currently not collectible.

This status determines you have no ability to pay so it flags your account as code 53, which means currently not collectible. There’s some equity here with the IRS.

If you have no ability to pay as demonstrated to the IRS, if your income is the same as your allowable expenses or if even a little less, the IRS will cease enforced collection activity on you, which is makes sense.

If you don’t have the ability to pay, how fair is it for them to garnish a paycheck or seize your bank accounts?

Another option available to you if you don’t qualify for an installment agreement is an offer in compromise.

An offer in compromise is a situation where the IRS will settle your debt for something less then you owe, which is called compromising the debt. That might be a few hundred to a few thousand dollars and it really just depends upon your ability to pay from your current income, equity, and assets.

Another option available to you if you don’t qualify for an installment agreement is filing for bankruptcy.