Randolph Law Firm, P.C.

Streamlined installment agreements: Who is eligible to apply?

If you can't pay your tax bill all at once, you may want to use an installment agreement to pay in monthly installments.

How do you put such an agreement in place? Do you have to submit detailed financial information or can you just go online or make a phone call to it up?

In this post, we will inform you about the latest changes to the streamlined installment agreement process.

The process depends a lot on how much you owe. Prior to 2012, if you owed more $25,000 in back taxes (including penalties and interest), you had to submit a detailed financial statement in order to get an installment agreement (IA). The financial statement is called the Collection Information Statement. The applicable forms are Form 433-A and Form 433-F.

In 2012, the IRS expanded the threshold from $25,000 to $50,000. This meant that if you owe $50,000 or less, and have monthly payments directly debited from your bank account, the IRS will not come after you with a tax lien

Fast-forward four years, to another presidential election year, and the IRS has announced another expansion of the IA thresholds. Under a pilot program that will run through September 30 of next year, taxpayers who owe between $50,000 and $100,000 will be eligible for expedited installment agreements that do not require financial statements.

In other words, the threshold amounts for the streamlined process have been doubled again, just as they were four years ago. To be sure, the latest doubling is only scheduled to last a year. But the intent is clear: to make it easier for people with higher levels of tax debt to set up installments agreements.

It isn't difficult to understand why the IRS is doing this. The streamlined process has been working well, with nearly 3 million such IAs set up last year. And with the IRS shorthanded on staff due to budget cuts, expanding the streamlined program further makes sense for the agency as well. It allows the IRS to save time on reviewing so many financial statements and focus on more complex cases.

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Randolph Law Firm, P.C.
6260 N. Durango Drive
Las Vegas, NV 89149

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