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Taxes On Installment Plan Possible Using Right Form

Associated Press

If you owe taxes but can’t pay the full amount, you can ask the Internal Revenue Service for an installment plan when you file.

“Just attach Form 9465, Installment Agreement Request, to the front of your tax return, explaining how much you propose to pay each month. The IRS will generally respond within 30 days,” said Judy Monahan, spokesperson for the Seattle District of the IRS.

Monahan says beginning Thursday, the agency will charge a user fee for entering into an installment agreement to pay delinquent taxes, and for restructuring or reinstating an installment agreement.

The fee for entering into an installment agreement will be $43. The fee for restructuring or reinstating an installment agreement will be $24.

The new fees are based on the cost to the IRS of providing the service, Monahan said.

Upon request, the agency must first determine whether an agreement is appropriate, then set up the agreement, process payments and monitor for conformance with the agreement.

Before restructuring or reinstating an installment agreement, the IRS goes through a series of steps, including analyzing why the agreement is in non-compliance, correspond with the taxpayer, and, if appropriate, restructure or reinstate the agreement.

Monahan said the fees recover the cost of services provided to groups of recipients beyond those benefits provided to the general public.

To get Form 9465, call the IRS tollfree forms number, 1-800-829-3676.

Another plan for sensible cowards

Sensible Coward’s Plan No. 1 suggests investors buy a five-year Treasury bond and use the interest checks to purchase stocks. Here’s another idea from Smith Barney:

With $10,000 to invest, put the first $5,000 into a zero-coupon Treasury bond. It pays no interest, but at maturity, in 2005, you receive $10,000 in principal. Invest the second $5,000 in growth stocks.

If you lose every penny in stocks, the bond preserves your original capital. If the stocks follow the average of the past 10 years, the $5,000 grows to about $15,000 - and the initial $10,000 stake to $25,000, not counting taxes. Smith Barney calls this the Security and Growth Fund.