The main advantage of an Installment Agreement is that it allows you to pay your tax debt over time in manageable monthly payments, avoiding the immediate burden of paying the full amount. It also prevents the IRS from taking enforced collection actions as long as you comply with the agreement terms. However, interest and penalties continue to accrue, increasing the total amount owed. Additionally, the IRS may file a Notice of Federal Tax Lien to protect its interests, which can negatively impact your credit score. Before entering an agreement, consider your long-term ability to make the payments and explore alternative resolution options, such as an Offer in Compromise.
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