The IRS is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. The test was scheduled to run through September 30, 2017 but has now been extended a year by the IRS.
During this test, more taxpayers will qualify to have their installment agreement request processed in a streamlined manner. Based on test results, the expanded criteria for streamlined processing of installment agreement requests may be made permanent.
During the test, expanded criteria for streamlined processing will be applied to installment agreement requests submitted to SB/SE Campus Collection Operations. This includes 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.
One expanded criterion being tested immediately is this: 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 their total assessed balance divided by 84 – or – the amount necessary to fully satisfy the liability by the Collection Statute Expiration Date.
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest of $50,000 or less.
| Current Streamlined Criteria | Test Criteria |
| Payment Terms Up to 72 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less |
Payment Terms None. This criteria is unchanged. |
| Collection Information Statement Verification of ability to pay required in event of an earlier default for assessed balances of $25,001 to $50,000. |
Collection Information Statement Not required. |
| Payment Method Direct debit payments or payroll deduction required for assessed balances of $25,001 to $50,000. |
Payment Method Direct debit payments or payroll deduction is preferred, but not required. |
| Notice of Federal Tax Lien Determination not required for assessed balances up to $25,000. Determination is not required for assessed balances of $25,001 - $50,000 with mandatory use of direct debit or payroll deduction agreement. Note: If taxpayer does not agree to direct debit or payroll deduction, then they do not qualify for Streamlined IA over $25,000. |
Notice of Federal Tax Lien No change in criteria for assessed balances up to $25,000. Determination is not required for assessed balances of $25,001 - $50,000 with the use of direct debit or payroll deduction agreement. Note: If taxpayer does not agree to direct debit or payroll deduction, then they do qualify for Streamlined IA over $25,000, but a Notice of Federal Tax Lien determination will be made. |
The test criteria discussed above also applies to all out of business debts up to $25,000 and all out of business sole-proprietorship debts up to $50,000. For in-business taxpayers, test criteria apply to income tax only debts up to $25,000.
For individual taxpayers who have filed all required returns and have an assessed balance of tax, penalties and interest between $50,001 and $100,000.
| Current Criteria | Test Criteria Changes |
| None - Streamlined processing criteria currently does not apply to assessed balances of tax between $50,001 and $100,000. | Payment Terms Up to 84 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less. |
| Collection Information Statement Not required if the taxpayer agrees to make payment by direct debit or payroll deduction. |
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| Payment Method Direct debit payments or payroll deduction is not required; however, if one of these methods is not used, then a Collection Information Statement is required. |
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| Notice of Federal Tax Lien Determination is required. |
The test criteria discussed above also applies to all out of business sole-proprietorship debts between $50,001 and $100,000.
Requests to Modify or Terminate An Installment Agreement
After an installment agreement is approved, you may submit a request to modify or terminate an installment agreement. This request will not suspend the statute of limitations on collection. While the IRS considers your request to modify or terminate the installment agreement, you must comply with the existing agreement. An installment agreement may be terminated if you provide materially incomplete or inaccurate information in response to an IRS request for a financial update.
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