IRS Payment Plans and Credit History
A common concern among taxpayers who owe money is whether poor credit will prevent them from setting up a payment plan with the IRS. In most cases, the answer is no.
The IRS does not perform traditional credit checks when approving standard installment agreements. Approval is based on:
- Whether required tax returns are filed
- The total balance owed
- Your reported income and expenses
Credit scores are not used to determine eligibility for most IRS payment plans.
Types of IRS Payment Options
The IRS offers several payment solutions, including:
- Short term payment plans for balances that can be paid quickly
- Long term installment agreements for larger balances
- Streamlined agreements for eligible taxpayers
These options are designed to help taxpayers resolve balances without relying on outside lenders.
When Credit Checks May Be Required
Credit checks may apply when using non IRS options such as:
- Tax debt financing companies
- Refund advance programs
- Private tax related loans
These services are not IRS programs and often require hard credit inquiries. They may also include higher interest rates and additional fees.
Choosing the Right Option
In many cases, working directly with the IRS is more affordable and avoids unnecessary credit damage. Third party financing should be considered carefully.
BD Tax LLC helps clients evaluate all available options to resolve tax debt efficiently while protecting their financial health.