The IRS recently announced that it will be extending the streamlined payment plan pilot program through September 30, 2018. The plan allows taxpayers with federal tax liabilities up to $100,000 to qualify for streamlined processing of their installment agreement requests. Eligible taxpayers must have filed all required returns and have an assessed balance of tax, penalties, and interest no more than $100,000.
The extended pilot program allows such taxpayers to enroll in an 84 month or seven year installment agreement. Under the pilot program, the payment terms have increased from 72 months or Collection Statute Expiration Date (CSED), whichever is less, to 84 months or the number of months necessary to satisfy the liability in full by the CSED, whichever is less.
The former criteria required taxpayers who owed more than $50,000 to file a Collection Information Statement with the IRS before being enrolled in an installment agreement. A Collection Information Statement is known as a Form 433-A and is basically a financial statement for the taxpayer. Taxpayers required to file Form 433-A must also include copies of bank statements, W-2s, check stubs, and ay debt outstanding with the form. The pilot program does not require taxpayers owing up to $100,000 to file Form 433-A as long as the taxpayer agrees to make monthly payments by direct deposit or payroll deduction.
Lastly, in order to qualify, a Notice of Federal Tax Lien determination is required. This will continue to be filed for taxpayers owing more than $50,000.
Based on the test results of the pilot program, the expanded criteria for streamlined processing of installment agreement requests may be made permanent. The expanded guidelines are a welcomed change to taxpayers owing taxes in excess of $50,000. The extended payment terms and ease of enrollment into an installment agreement should help to reduce taxpayer burden.
[author: Dustin Scott, Tax Accountant]
The IRS recently announced that it will be extending the streamlined payment plan pilot program through September 30, 2018. The plan allows taxpayers with federal tax liabilities up to $100,000 to qualify for streamlined processing of their installment agreement requests. Eligible taxpayers must have filed all required returns and have an assessed balance of tax, penalties, and interest no more than $100,000.
The extended pilot program allows such taxpayers to enroll in an 84 month or seven year installment agreement. Under the pilot program, the payment terms have increased from 72 months or Collection Statute Expiration Date (CSED), whichever is less, to 84 months or the number of months necessary to satisfy the liability in full by the CSED, whichever is less.
The former criteria required taxpayers who owed more than $50,000 to file a Collection Information Statement with the IRS before being enrolled in an installment agreement. A Collection Information Statement is known as a Form 433-A and is basically a financial statement for the taxpayer. Taxpayers required to file Form 433-A must also include copies of bank statements, W-2s, check stubs, and ay debt outstanding with the form. The pilot program does not require taxpayers owing up to $100,000 to file Form 433-A as long as the taxpayer agrees to make monthly payments by direct deposit or payroll deduction.
Lastly, in order to qualify, a Notice of Federal Tax Lien determination is required. This will continue to be filed for taxpayers owing more than $50,000.
Based on the test results of the pilot program, the expanded criteria for streamlined processing of installment agreement requests may be made permanent. The expanded guidelines are a welcomed change to taxpayers owing taxes in excess of $50,000. The extended payment terms and ease of enrollment into an installment agreement should help to reduce taxpayer burden.
