The Internal Revenue Service (IRS) offers taxpayers the option to enter into a Non-Disclosure Installment Agreement (NDIA) to pay off their tax debt over time. This agreement allows you to make monthly payments towards your tax debt until it is fully paid off. The NDIA is a great option for those who are unable to pay their entire tax debt at once.
The NDIA is a binding contract between the taxpayer and the IRS. The agreement typically includes a monthly payment amount, due date, and length of the repayment period. The amount of your monthly payment will depend on various factors such as the amount of your tax debt, your income, and other expenses. Interest and penalties will continue to accrue during the repayment period.
The NDIA requires that you disclose your financial information to the IRS. This information includes your income, assets, and expenses. The IRS uses this information to determine the monthly payment amount you can afford. Failure to disclose accurate financial information could result in the termination of your NDIA and the IRS taking collection action against you.
The NDIA also comes with certain restrictions. The IRS may file a Notice of Federal Tax Lien, which secures the government’s interest in your property as collateral for the tax debt. Additionally, the NDIA may require that you pay the debt in full if you receive an inheritance, sell property, or experience a significant increase in income during the repayment period.
The NDIA can be a good option for those who are unable to pay their tax debt in full. It allows you to pay off your debt over time and avoid collection action from the IRS. However, it is important to understand the terms and restrictions of the agreement before signing it. Be sure to disclose accurate financial information to the IRS and make timely payments to avoid defaulting on the agreement.
In conclusion, if you are struggling to pay your tax debt, the Non-Disclosure Installment Agreement can be a viable option for you. However, it is critical that you understand the terms and restrictions of the agreement and disclose accurate financial information to the IRS. As with any financial decision, it is best to consult with a tax professional to determine if the NDIA is the best option for you.
