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Question regarding IRS installment agreement :UPDATE
Posted on 6/23/15 at 7:38 pm
Posted on 6/23/15 at 7:38 pm
I have a client trying to close a loan and the underwriter is saying they need an installment plan for her 2014 taxes. She already has one for 2013. To my knowledge once an installment plan is in place it carries over automatically and therefore what the underwriter is requiring is already in place. Supposed to close this last Friday and underwriter won't budge. Any help is appreciated
Had CPA issue letter on company letterhead she had spoken with IRS and new installment was in place combining 2013 & 2014 taxes, and letter is on way via snail mail. Underwriter accepted this and client is closing today.
Had CPA issue letter on company letterhead she had spoken with IRS and new installment was in place combining 2013 & 2014 taxes, and letter is on way via snail mail. Underwriter accepted this and client is closing today.
This post was edited on 6/25/15 at 9:42 am
5
Posted on 6/23/15 at 8:08 pm to ItNeverRains
Your client may have defaulted on her 2013 installment plan when she did not full pay her 2014 taxes by 4-15-15. Tell her to call IRS and get a new installmet plan for both years.
Posted on 6/23/15 at 10:47 pm to ItNeverRains
An installment plan is for a set amount of money for set years for set time to repay. If she was short on her 2014 taxes, she needs to call the IRS and add the 2014 amounts to her installment agreement, which essentially results in a new agreement. As long as the amounts aren't above 50K, this is pretty simple to do. But she actually has to take action.
Posted on 6/24/15 at 4:59 am to ItNeverRains
So she can't pay 2 years of taxes so she's buying a house?
Posted on 6/24/15 at 5:50 am to yellowfin
quote:
So she can't pay 2 years of taxes so she's buying a house?
She can pay, have explored option, prefers installment.
Posted on 6/24/15 at 7:12 am to ItNeverRains
She would come out ahead putting it on a credit card, fees are outrageous on installment plans.
But she does need a new one to answer original question
But she does need a new one to answer original question
Posted on 6/24/15 at 8:16 am to yellowfin
To clarify, she'll pay it off immediately after close. She's an artist and has funds in both Canadian and Australian accounts, but will take 7 days from either bank due to amount. Not an everyday situation to say least. So at this point installment is fastest train to the station
This post was edited on 6/24/15 at 8:18 am
Posted on 6/24/15 at 8:25 am to ItNeverRains
good luck getting anything out of the irs in less than 7 days 
Posted on 6/24/15 at 10:11 am to yellowfin
quote:
She would come out ahead putting it on a credit card, fees are outrageous on installment plans.
I screwed up my withholding last year and looked at Installment vs. CC at 5.5% and installment came out ahead unless I'm not understanding them correctly.
Posted on 6/24/15 at 2:09 pm to ItNeverRains
No offense, but why are you extending a loan to someone who has an installment agreement with the IRS. That means she wasn't able to cough up her taxes during the year, yet she will be able to pay your loan? Sounds risky.
Posted on 6/24/15 at 7:42 pm to ItNeverRains
I think you will find it takes 45 days to get an installmet agreement approved with the IRS.
Posted on 6/24/15 at 8:37 pm to Golfer
They usually charge penalties on top of that
Posted on 6/24/15 at 8:43 pm to yellowfin
quote:
They usually charge penalties on top of that
Each month? I was under the impression based on what I read that I was charged a penalty based on the amount I failed to pay by 4/15...the balance plus that penalty is paid in an installment agreement a X% interest rate.
Posted on 6/24/15 at 8:46 pm to Golfer
Penalties will max out after 5 months. Interest accrues until it's paid out.
Posted on 6/24/15 at 8:49 pm to tigeryat
Thanks. Should have just put it on my AMEX for the miles
Posted on 6/25/15 at 9:51 am to idlewatcher
quote:
No offense, but why are you extending a loan to someone who has an installment agreement with the IRS. That means she wasn't able to cough up her taxes during the year, yet she will be able to pay your loan? Sounds risky.
None taken, I'm not extending anything to anyone. I represented a buyer wanting to build new construction on their land and introduced them to one of the builders I work with. They contracted on the home for 287k in Dec 2014. The final appraisal came in at 331k from the lender. She could get 350k tomorrow.
Based on info I have, if it were me I'd take out Heloc with equity in home and pay off IRS, since that plus new mortgage is still cheaper than client was paying in rent. Then in a year refi both conventional and drop the pmi.
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