July 12, 2016

IRS Installment Agreement

Installment Agreement with the IRS

Installment Agreement with the IRS

An Installment Agreement is an agreement with the IRS that allow full payment of the tax liability in equal monthly payments. If a taxpayer is unable to pay the full amount of their tax liability, this agreement is designed to allow them to pay back the owed amount in installments. Installment amount is contingent on both the amount owed and ability to pay that amount back within the confines of the tax collection statute of limitations.

It’s strongly advised deliquent taxpayers pay a portion of the owed amount and then use Form 9465 to request an installment plan. Or you can opt to apply for an payment agreement online through the IRS website.

You may either apply as an individual, or have your tax attorney apply for you. If you are an attorney applying for your client you will need:

Taxpayer’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
Your Centralized Authorization File (CAF) number
Caller ID from notice or POA’s signature date on Form 2848
Taxpayer’s last year’s Adjusted Gross Income (if 2014 was recently filed, then use 2013’s AGI)

Under the IRC § 6159 the IRS is required to accept an installment agreement if:
The owed amount (not including interests, penalties and other additions) is $10,000 or less;
Within the last five years taxpayer has not failed to file a return, has not failed to pay any tax shown on such return or has not entered into a prior installment agreement;
Based on provided tax payer information, the IRS has determined that the taxpayer is financially unable to pay the liability in full when due;
The installment agreement will result in satisfaction of the full liability within three years;
The taxpayer agrees to comply with the requirement of filing returns and making payments while the agreement is in effect.

The Internal Revenue Service (IRS)

If none of these IRC § 6159 requirements are met, the IRS holds the right to accept or reject the proposed installment agreement provided by the taxpayer. For more information read Topic 202.
Things to note:

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