Did you receive an IRS Annual Installment Agreement Statement, a Form CP-89?

Posted on November 01, 2013

If you owe money to the IRS, you will get a Form CP-89, an Annual Installment Agreement Statement. Getting any mail from the IRS is always a little intimidating, especially when you can’t quite decipher it and when the numbers listed on it are inaccurate.

The title of the notice is, at best, confusing. Worse yet, it is usually very inaccurate. The Taxpayer Reform Act of 1998 requires the IRS to issue annual notices to people that owe money to the IRS. The title of the notice is odd in that it implies that you have an agreement with the IRS, which may or may not be true.

The IRS sends these notices to all taxpayers whether or not they have an agreement with the IRS, so the title can be quite misleading.

As tax attorney professionals, we receive a lot of inquires on these forms. We find that the notices are usually inaccurate as to both payments made and the current balance due. Because of these inaccuracies, we simply do not rely on these notice at all because they are fairly useless. And don’t get me started on the huge cost of generating these notices, another terrible waste of taxpayer dollars.

If you don’t have an agreement with the IRS, well, you don’t have an agreement with the Internal Revenue Service. Chances are you probably know that you owe the IRS money already, so this is simply serving as a reminder. If you’re ready to negotiate with the IRS, we recommend speaking with a tax attorney first. By choosing a tax attorney that has experience dealing with, or in my case working at the IRS, that attorney can represent you and help negotiate on your behalf, which will ultimately save you money in the end.

If you do have an agreement with the IRS, check your Form CP-89 for accuracy in those numbers, however don’t be worried if they vary from your own personal accounting figures. Do you owe a lot? Ever wonder if you could negotiate those numbers down a bit? It’s never too late to consult an attorney, but the sooner the better. The sooner you are out from under your IRS liabilities and the less you have to pay, the easier it will be to move on with your life.