Sisyphus on a Scree Slope
February 7, 2015 12:07 PM   Subscribe

Can a person who owes past federal taxes and has set up a payment plan with the IRS make voluntary contributions to her employer's retirement plan, provided she continues to make the payments to the IRS as agreed?

The question is about what is possible/permissible/legal, not whether or not she should.
posted by perspicio to Law & Government (5 answers total)
They're actually pretty cool. Call them and ask.
posted by Ruthless Bunny at 12:19 PM on February 7, 2015

I agree you can call the IRS and they are fairly easy to talk to, but I can't imagine why this wouldn't be OK.

You agreed to make a payment plan and you're making the payments; what possible right or argument could they have for caring about what you do with the rest of your money?
posted by drjimmy11 at 12:25 PM on February 7, 2015

I'm currently doing this. No problems at all.
posted by JoeZydeco at 12:36 PM on February 7, 2015

I did, for years. The IRS is totally easy to work with. Your state tax bureau (if you owe with them) may be tougher. Mine was. (I had a many-years tax burden to pay off. Federal? Simple. State? Awful.)
posted by xingcat at 12:36 PM on February 7, 2015

So, you have it, here is the Internal Revenue Manual section on what counts as defaulting on an installment agreement.

Make sure you file your 2014 return on time and, if you owe, pay as much as you can by April 15. Any remaining balance after April 15 will cause your installment agreement to default, but you can call them to have it reinstated and roll your new balance into it (there's an additional setup fee for this). It's not a big deal; it happens all the time.
posted by melissasaurus at 1:23 PM on February 7, 2015

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