Payment options written on notepadTaxpayers who owe back taxes may be getting some extra help. The IRS announced recently that it is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. When a taxpayer owes money to the IRS, there are several options for him/her to address the outstanding balance. In many instances, it is not possible or feasible to pay the balance due all at once. An Installment Agreement permits payment over time.

The IRS already allows qualified individual taxpayers to use the IRS’s Online Payment Agreement application. Taxpayers can request an installment agreement and set up a payment plan electing the direct debit method of payment. The IRS also permits streamlined processing of agreements in limited situations.

Under the new initiative, the IRS is testing allowing more taxpayers to qualify to have their installment agreement request processed in a streamlined manner. For example, individual taxpayers with an assessed balance of tax, penalty, and interest between $50,000 and $100,000 may experience accelerated processing of their installment agreement request. This will occur if the taxpayers’ proposed monthly payment is the greater of: (i) their total assessed balance divided by 84; or (ii) the amount necessary to fully satisfy the liability by the Collection Statute Expiration Date.

The testing will be applied to installment agreement requests submitted to SB/SE Campus Collection Operations, including the Automated Collection System (ACS). Expanded criteria will not be applied to installment agreement requests submitted to W&I Accounts Management, SB/SE Field Collection, or through the Online Payment Agreement application. The test is scheduled to run through September 30, 2017, and may become permanent.

Before applying for any payment plan, taxpayers must meet certain requirements. If you owe back taxes, we can help you evaluate your options and help to negotiate an installment payment plan. Contact us for a consultation.