How the IRS can Revoke or Cancel your Installment Agreement

By mrobinson | Dec 18, 2009 | 0 Comments | Rating: 0

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Just because you have an installment agreement with the IRS does not mean that it will stay in place indefinitely. In other words, they have the right to revoke or cancel your installment agreement under certain circumstances. It is good to know what these circumstances are to ensure that you do not do anything that will jeopardize the payment plan that you currently have in place.

Once you receive approval of your installment agreement both you and the IRS are held to the terms and conditions of the agreement. Some of the reasons why your installment agreement can be canceled include:

1. You have failed to file your tax returns after the installment agreement was put into place. Or you have failed to pay taxes that arose after the agreement was made active. The IRS does monitor your returns and payments to ensure that you are on the right track and not breaking the terms of your installment agreement.
2. You miss a payment. When you sign up for an installment agreement the IRS expects you to make all payments in full and on time. If you miss just one your installment agreement can be revoked. Even though the IRS may wait 30 to 60 days to revoke your installment agreement, you never want to take the risk.
3. Your financial situation changes. The IRS may not find out about this unless you personally tell them. That being said, they may review your case every one to two years while also asking you to submit a new Form 433-A.
4. The IRS learns that you supplied inaccurate information on your request for an installment agreement. For example, you may have purposely left off assets to make it appear that you have less money.

Entering into an installment agreement with the IRS is something to take seriously. There are terms and conditions that both parties must agree to upfront. If you decide to break any of the rules that govern your installment agreement the IRS can revoke or cancel it almost immediately.

If you are currently paying your debt via an installment agreement make sure you don't do anything to jeopardize it.

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