Streamlined Installment Agreements

Streamlined Installment Agreements
The IRS released SBSE Memorandum (SBSE-05-0112-013), Streamlined Installment Agreements (IA), on January 20, 2012. It provides interim guidance memorandum and is issued to Collection Field function employees to implement policy changes to Streamlined Installment Agreements. These changes are effective immediately and will be placed into the next revisions of the IRM's 5.14.5 and 5.14.10. 

The primary changes to the Streamlined IA criteria are:
• The dollar threshold increases from $25,000 to $50,000 aggregate unpaid balance of assessment (SUMRY balance); and,
• The timeframe to full pay increases from 60 months to 72 months.

The streamlined installment agreement program allows for personal income tax debt or out-of-business sole proprietors seventy-two (72) months to repay an aggregate unpaid balance of assessment under $50,000 with no lien determination as long as the plan is a direct debit installment agreement (DDIA).

Based on these new criteria, when working accounts where the aggregate unpaid balance of assessment (SUMRY balance) is $25,000 or less, the ONLY criterion that changes is that the taxpayer now has 72 months instead of 60 months to full pay. All of the other criteria remain the same:
• CSED protected
• Type of Entity
         • IMF
         • Out of Business BMF
         • BMF Income Tax ONLY (Form 1120)
• No lien determination required
• No managerial approval required
• No CIS required

However, when working accounts where the aggregate unpaid balance of assessment
(SUMRY balance) is $25,001 - $50,000, the streamlined IA criteria become more
specific. The criteria for these accounts are:
• Payable within 72 months
• CSED protected
• No lien determination or managerial approval required
• Type of Entity
• IMF
• Out of Business Sole- Proprietors
• Agreement must be established as a Direct Debit Installment Agreement (DDIA); and
• Ability to pay verified by securing a Collection Information Statement (CIS) per IRM 5.1.10.3.2 and IRM 5.15.1 or use of the Streamlined IA Calculator (SLIAC).

Streamlined IAs may not be granted where the first payment on the agreement is a lump sum payment that is made to pay down the balance to meet the $50,000 or less aggregate unpaid balance of assessment (SUMRY balance) threshold. 

Taxpayers must meet the $50,000 aggregate unpaid balance of assessment (SUMRY balance) threshold at the time the Streamlined IA is granted. However, for a Streamlined IA, taxpayers with a liability greater than $50,000 can be considered if they pay down the liability to $50,000 or less prior to the agreement being granted.

The key changes in treatment for a Streamlined IA when the aggregate unpaid balance of assessment (SUMRY balance) is $25,001 - $50,000:
• Type of taxpayer can ONLY be an individual (IMF) or an Out of Business – Sole Proprietor;
• Agreement must be established as a DDIA; and
• Ability to pay verified by securing a Collection Information Statement (CIS) per IRM 5.1.10.3.2 and IRM 5.15.1 or use of the SLIAC.

The new SLIAC will use the base Allowable Living Expenses (ALE) standards to determine whether the taxpayer has sufficient income to sustain the minimal IA payment at a particular debt level for 72 months.

The "Streamlined IA Calculator" is the verification tool that validates whether the taxpayer has adequate income to support the proposed IA payment. If the SLIAC indicates a higher payment can be made, the proposed payment amount will still be accepted.

If you have any kind of IRS tax liability (large or small) and would like to be considered for an streamlined Installment Payment Plan (liabilities under $50,000), Offer in Compromise, partial payment plan for existing life of statute or noncollectable status) contact us for a FREE confidential consultation regarding your options please call Stephen B. Jordan EA at 603.893.9336 or go to our website Stephen B Jordan EA