If your business had a federal tax liability with the IRS, you may qualify for a payment plan. The IRS has several plans for both individuals and businesses to help make it more manageable to pay your tax debt. One payment plan in particular that can be effective for your business is the partial payment installment agreement (PPIA).
PPIA for Businesses
When the IRS notifies you about a tax debt, it also issues a collection date called the Collection Statute Expiration Date (CSED). The CSED is typically 10 years from the tax assessment date. The IRS will try aggressively to get this money from you before the CSED passes, so it's usually not worth it to wait it out.
The PPIA lets you make monthly payments based on your ability to pay. These payments continue until the debt is paid or until the CSED passes—any remaining balance after the expiration date is forgiven.
Requesting a PPIA as a Business
- You'll need to ensure your business meets the eligibility criteria for a PPIA before you request one:
- Tax debt of $10,000 or more
- Don't qualify for a regular installment agreement or Offer in Compromise
- Past tax returns have been filed
- No bankruptcy
- No assets that could cover the tax bill
You'll also have to fill out Form 433-A if you're a sole proprietor or Form 433-B if you're a partnership, corporation, exempt organization, S corporation, or limited liability company (LLC). This form asks for detailed financial information about your business, including:
- Basic business info (name, entity type, number of employees, etc.)
- Monthly gross payroll amount
- Frequency of tax deposits
- Payment processors used (for online sales)
- Contact info for all partners, officers, LLC members, and major shareholders
- Cash on hand and business bank accounts
- Monthly income and expense statement
Get Help Requesting a PPIA for Your Business
Form 433-B can be a bit overwhelming to fill out, even if your business financial records are up-to-date. Our tax attorneys at Gabaie & Associates, LLC can help ensure you provide accurate information on the form and assist you with requesting a PPIA. We can also do a thorough assessment of your tax situation to determine if a different IRS installment agreement is actually the right option for your situation. Call (410) 358-1500 or send us a message via our contact form for a free consultation.
