Payment Plans Types and Consequences

The IRS wants you in a payment plan.  As a matter of fact, the IRS person on the phone will gladly set you up with a plan that has lots of benefits. - for the Government that is.  If you are on a payment plan of any kind with the IRS:

• It will, in all probability, never pay the IRS off due to the extreme penalties plus interest.

• It will cost you $43 for the privilege of setting up a plan that will probably never end.

• In most instances, you are almost always better off without a formal payment plan.

• Read the pages here on Offers in Compromise and the pages on Bankruptcy

• The biggest problem I have with formal IRS Payment Plans (also called Installment Agreements) is the way the IRS applies your money when you pay.