The IRS sometimes rejects requests for payment plans; if this happens to you, you have the right to appeal. You must request an appeal within 30 days of the rejection by filing Form 9423, Request for Collection Appeals. The IRS can reject a payment plan or installment agreement for a variety of reasons. One of the most common reasons why a person provided false or incorrect information in their request.
Failure to report income or making mathematical errors can result in a denial. Another common reason is to submit a bad offer. While installment agreements are intended to help taxpayers obtain debt relief, they are also intended to help the IRS collect debts. The IRS will also reject applications from taxpayers who are going through a bankruptcy case.
The IRS generally rejects a request for an installment agreement for one of these three reasons. If the IRS determines that your living expenses do not fall under the “necessary” category, your agreement will most likely be rejected. The IRS considers outlandish expenses to include charitable contributions, funding for private schools and large credit card payments. If your installment agreement is denied, the IRS can seize your property.
You have 30 days to appeal the rejection. If you appeal, the IRS cannot seize your property or garnish your salary until the appeal is accepted or denied. The IRS did not mail monthly proof of payment during the relief period due to the closure of IRS offices due to COVID-19.An IRS installment agreement is an optimal solution for reducing the amount of your debt to the IRS. Applicants must submit the form to the IRS within 30 days from the date of their letter of acceptance of the installment agreement to ask the IRS to reconsider their status.