NSTPInstallment Agreements, online payment agreement

The IRS is testing expanded criteria for streamlined processing of taxpayer requests for installment agreements. The test is scheduled to run through September 30, 2017.

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 period, 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.

The program will streamline payment plan set-up for more taxpayers, by:

  • Increasing the dollar threshold for expedited processing from $50,000 to $100,000, if taxpayers agree to pay by direct debit from a financial account or payroll deduction.
  • Increasing payment terms from 72 months to 84 months (subject to collection statute limitation).
  • Removing the requirement to submit financial condition documentation that’s normally required for all installment agreements on balances of more than $50,000.

However, an important distinction of the test program is that the IRS will continue to file a federal tax lien on taxpayers who owe more than $50,000.

The December 2015 ‘Fixing America’s Surface Transportation’ act created Internal Revenue Code Section 7345, which tied foreign travel to taxes. Under this section, taxpayers’ passports can be restricted if they owe more than $50,000 in tax debt and are not in compliance with the IRS. The IRS is preparing to implement these rules in the next few months.

Under the new IRS test program, taxpayers whose passports have been restricted because of tax debt will have an easier time getting back in good standing with the IRS. With the program’s increased debt threshold, these taxpayers will be able to work quickly with the IRS to establish a payment agreement. Then, the IRS can work with the State Department to lift passport restrictions.

Note: Under existing criteria, approximately 90 percent of individual taxpayers with a balance due qualify to use the IRS’s Online Payment Agreement application. IRS encourages individual taxpayers to use the online application and increase their convenience by electing the direct debit method of payment.