Quick Answer: You cannot have two IRS payment plans simultaneously, as owing taxes for subsequent years defaults existing installment agreements. The taxpayer should consider requesting non-collectible status given minimal income or filing an Offer in Compromise to settle the combined $46,000 debt for a smaller amount.
“Dear Jim,
Currently on a payment agreement with the irs for one year, with payments being $25.00 a month. I’m not employed, but I am seeking employment. Most likely my next employment will be of minimum wage. I have nothing, no properties, cars, nor any type of valuables. The due amount is about $16,000. For taxes of Yr 2010. I have yet to submit the ones for 2011 which will put me owning about another 30,000.
Can I be on two payment agreements, for two different years, at the same time?
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This is a great question Mary.
Can you have two different payment plans with the IRS? The answer is no.
In fact, a condition of an installment agreement with the IRS is that you agree not to owe for a subsequent year – or the payment arrangement will default.
If you are going to be on minimum wage, you may want to ask the IRS to put you in non-collectible status. Keep in mind that your status will be determined by your “ability to pay” (i.e. your monthly income less allowable living expenses). Because you currently are in a $25 a month payment plan on $16,000, you will not pay your debt before the statute of limitations expires, unless your financial picture improves.
One important note, after you file your 2011 and 2012 returns, you should consider filing an Offer in Compromise as you appear to have minimal monthly income and no assets. Your offer may be very small and would allow you to settle the debt and get a fresh start.
Thanks for your question and I hope your financial situation improves.
Jim
Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.
If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.
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