Based on her Year 1 return, the IRS properly assessed and sent Fernanda a Demand for Payment for $7,000 of unpaid tax liability, $3,000 in interest, and $2,000 in penalties. She was recently fired from her job and thus does not have the funds available to pay the entire liability within the 10-day period reflected in the notice. She had always filed her returns on time.

1. 1. What type of installment payment options are available to Fernanda?
2. 2. Over how many years might the IRS allow her to spread the payments?
3. 3. How might your answers to Questions 1 and 2 change if the outstanding tax liability were $40,000 plus $6,000 in interest and $2,000 in penalties?
4. 4. How might your answers to Questions 1 and 2 change if the outstanding tax liability were $40,000 plus $9,000 in interest and $3,000 in penalties?