What This Letter Means
You have a payroll deduction installment agreement. Your employer takes a set amount from your pay and sends it to the IRS. Letter 2318C, Installment Agreement; Payroll Deduction, tells you that a new tax balance has been added to your account and explains what that does to your agreement.
There are two versions of this situation:
- Your current payment still works. The IRS has added the new balance to your existing payroll deduction agreement. The letter tells you to notify your employer about the change.
- Your current payment is too low. Your existing payment no longer covers the total you owe within IRS guidelines. The letter tells you the minimum monthly payment the IRS will accept and includes a new Form 2159, Payroll Deduction Agreement, to complete.
What to Do
- If the IRS added the balance to your plan, tell your payroll or HR department and give them a copy of the letter.
- If you received a new Form 2159, complete it with your employer and return it to the address on the letter by the date shown.
- If you can't afford the new minimum payment, call the number on the letter before the deadline to discuss other options.
- File all future returns on time and avoid new balances.
If You Don't Respond
When a new Form 2159 is requested, the IRS gives you a short window, generally 15 days, to reply. If it doesn't hear from you, your payroll deduction agreement can be defaulted. A defaulted agreement puts your account back into collection.
Deadlines
Use the date printed on the letter. Act quickly. The reply window for this letter is short.
If a new tax bill is threatening your payroll deduction agreement, call us at (813) 229-7100.