Intuit Academy Tax Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What is the purpose of an IRS installment agreement?

To apply for tax credits

To lower interest rates on taxes owed

To allow taxpayers to pay tax debt over time

The purpose of an IRS installment agreement is to allow taxpayers to pay tax debt over time. This arrangement is beneficial for individuals who are unable to pay their entire tax liability in a single payment due to financial constraints. By entering into an installment agreement, taxpayers can set up a manageable payment plan with the IRS that breaks down their total owed amount into smaller, more affordable monthly payments. This helps taxpayers avoid further penalties and the potential for more severe collection actions by the IRS, such as wage garnishments or property liens.

This option addresses a fundamental aspect of tax management by providing relief to those struggling to meet their tax obligations all at once. Taxpayers who utilize this option can effectively manage their finances while ensuring compliance with their tax responsibilities.

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To increase tax deductions

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