home PHONE
home about get started deliver services resources contact
divider
1040
left
left
left nav
left
left
left
left
left
left
alert!

section nav
View Section 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12


Section 5. Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements and Extensions of Time to Pay


5.14.5  Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements and Extensions of Time to Pay
  • 5.14.5.1   Overview
  • 5.14.5.2   Streamlined Installment Agreements
  • 5.14.5.3   Guaranteed Installment Agreements
  • 5.14.5.4   In-Business Trust Fund Express Installment Agreements
  • 5.14.5.5   Extensions of Time to Pay
5.14.5.1  (03-30-2002) 
Overview
  1. Streamlined and In-Business Trust Fund Express agreements benefit taxpayers because they may be processed quickly, without financial analysis or managerial approval. Guaranteed agreements provide taxpayers with a one-time account delinquency the statutory right to an agreement if their taxes are $10,000 or less and certain other conditions are met. Extensions of time to pay may be granted to taxpayers able to pay by a certain date.
5.14.5.2  (07-12-2005) 
Streamlined Installment Agreements
  1. Streamlined installment agreements may be approved for taxpayers under the following circumstances:
    1. The aggregate unpaid balance of assessments (the SUMRY balance) is $25,000 or less. The unpaid balance of assessments includes tax, assessed penalty and interest, and all other assessments on the tax modules. It does not include accrued penalty and interest.
    2. If pre-assessed taxes are included, the pre-assessed liability plus unpaid balance of assessments must be $25,000 or less.
    3. The aggregate unpaid balance of assessments will be fully paid in 60 months, or the agreement will be fully paid prior to the CSED, whichever comes first. (Use IDRS CC ICOMP) (See IRM 5.14.2.1 regarding CSED extensions)
      Note:

      Agreements that require CSED extensions may not be processed as " streamlined" agreements. (See IRM 5.14.2.1.)

  1. Accounts in any status qualify, including:
    • Notice status accounts;
    • Balance due status accounts; and,
    • Pre-assessed accounts.
  2. The following types of taxpayers qualify for streamlined agreements:
    • IMF;
    • BMF (income tax only); and,
    • Out of business BMF (any type tax.)
  3. A lien determination is not required but may be made at the discretion of the revenue officer and liens may be filed.
  4. No managerial approval is required.
  5. These agreements may be secured in person, by telephone or by correspondence.
  6. As with all agreements, the taxpayer must have filed all tax returns that are due prior to entering into the agreement. (See IRM 5.14.1.3 and IRM 5.14.1.5.1.)
  7. See IRM 5.14.11.7, regarding reinstatement of agreements that meet streamlined criteria.
  8. Encourage taxpayers to pay assessed amounts greater than $25,000 to:
    • avoid the need for securing financial statements; and,
    • qualify for streamlined agreements.

    (See IRM 5.14.1.5(8)(Example))

  1. Taxpayers may be granted streamlined agreements based on the criteria provided in IRM 5.14.5.2(1) – (9), even if they are able to fully pay their accounts.
  2. Penalty and interest continue to accrue during installment agreements. If taxpayers are notified of this they may decide it is in their best interest to fully pay balance due accounts.
5.14.5.3  (07-12-2005) 
Guaranteed Installment Agreements
  1. Internal Revenue Code (IRC) section 6159(c) requires the Service to accept proposals of installment agreements under certain circumstances. In accordance with IRC 6159(c) the Service must accept proposals to pay in installments if taxpayers:
    1. owe income tax only of $10,000 or less;
    2. have filed and paid all tax returns during the five years prior to the year of the liability;
    3. cannot pay the tax immediately (see (2) below);
    4. agree to fully pay the tax liability within 3 years;
    5. file and pay all tax returns during agreements; and,
    6. have not had installment agreements during the prior five year period.
      Note:

      The $25 minimum monthly payment does not apply to guaranteed installment agreements. (See IRM 5.14.4.2.)

  1. As a matter of policy the Service grants guaranteed agreements even if taxpayers are able to fully pay their accounts. (See also IRM 5.14.1.5(8), and IRM 5.14.5.2(10).)
  2. Unlike the criteria for streamlined agreements, the dollar limit for guaranteed agreements of $10,000 applies to tax only. The taxpayer may owe additional amounts in penalty and interest (both assessed and accrued) and qualify for a guaranteed agreement, so long as the tax alone is not greater than $10,000.
  3. Guaranteed installment agreements may be granted by revenue officers and other contact employees. Managerial approval is not required for these agreements.
    Note:

    Agreements that require CSED extensions may not be processed as "guaranteed" agreements. (See IRM 5.14.2.1 (2)).

    .

  1. IDRS CC ICOMP will be used to determine if the tax, including statutory additions, can be fully paid within three years.
  2. If taxpayers do not qualify for guaranteed agreements, consider streamlined agreements prior to considering other alternatives. Process guaranteed agreements as streamlined agreements.
  3. Penalty and interest continue to accrue during these – and all other – installment agreements, though they are guaranteed by law. If taxpayers are notified of this they may decide it is in their best interest to fully pay balance due accounts.
5.14.5.4  (07-12-2005) 
In-Business 
Trust Fund Express  
Installment Agreements
  1. In-Business Trust Fund (IBTF) Express installment agreements may be granted if:
    1. pre-assessed liabilities plus the unpaid balance of assessments is $1,500 or less. (IRM 5.14.5.2(1)(a) describes the composition of unpaid balance of assessments.)
      Note:

      ACS and Campuses may grant Express installment agreements if pre-assessed liabilities plus the unpaid balance of assessments is $10,000 or less.

    1. Taxes are fully paid in 24 months, or before the CSED, whichever is earlier. (Use IDRS CC ICOMP to calculate agreement lengths; see IRM 5.14.2.1 regarding CSED extensions.)
  1. If accounts qualify for IBTF Express agreements:
    1. No financial statement is required.
    2. Input bank and receivables information to ICS.
    3. No lien determination is required. Liens may be filed if they will protect the government’s interest (such as if a property sale is imminent).
    4. No Trust Fund Recovery Penalty determination is required.
    5. Check IDRS for (and verify with taxpayers) filing and payment compliance. If not in filing compliance, installment agreements may not be granted.
    6. If — for any reason — rejection of installment agreements is planned, refer for Independent Administrative Review. (See IRM 5.14.9.3.)
    7. Use agreement locator number (ALN) 0215.
  1. No managerial approval is required.
  1. Monitoring requirements:
    1. No further field action is required. No monitoring is necessary in Centralized Case Processing or the field.
    2. Request status 60 immediately after approval, for systemic monitoring of these agreements.
      Note:

      Approval of installment agreements on ICS does not generate status 60 on IDRS. Forward approved documents on Forms 795.

  1. If IBTF Express agreements are in default, or are terminated, they may be reinstated or new agreements may be granted immediately if:
    1. The taxpayer re-qualifies for an agreement under the above guidelines, or other guidelines provided in this manual. (Also see IRM 5.14.11.)
    2. The Collection Statute Expiration Date (CSED) is considered (See IRM 5.14.5.4(1)(b).)
  2. Business accounts over $1,500 do not qualify for IBTF Express agreements.
    1. Use Streamlined procedures (IRM 5.14.5.2) for income taxes on in business accounts and out of business accounts $25,000 or less.
    2. See IRM 5.14.7 for IBTF accounts that do not meet the above criteria.
  3. W&I and SB/SE Campus Compliance and ACS employees may grant IBTF Express agreements with the following modifications:
    1. Input bank and receivables information to IDRS CC LEVYS.
    2. Use ALN XX15. (XX = originating function; see Exhibit 5.14.1–2)
    3. If pre-assessed liabilities plus the unpaid balance of assessments is $10,000 or less.
5.14.5.5  (07-12-2005) 
Extensions of Time to Pay
  1. Extensions of time to pay provide a specific date by which full payment of taxes is expected. Extensions may be granted for up to 120 days for all taxpayers. Encourage taxpayers to pay within 120 days by using one of the following methods:
    1. Deferring payments to other debts
    2. Selling assets
    3. Borrowing from friends or family
    4. Getting a loan (using home equity or other assets as collateral for a loan)
    5. Getting someone to co-sign for a loan
    6. Borrowing from a 401K or retirement plan
    7. Using available credit on a credit card (Cash advance or credit card payments)
    Note:

    Explain to the taxpayer the benefits of paying as soon as possible. Interest and penalty continues to be charged on the unpaid balance until tax, interest, and penalty is paid in full. The interest on a loan or credit card payments may be less than the combined penalty and interest charges imposed by the Internal Revenue Code.

  1. Extensions of time to pay are not installment agreements and do not provide for periodic payments. No forms are required. Form 433–D may not be used. TC 971 will not be input. The extensions of time to pay discussed here are also not statutory extensions under section 6161.
    Exception:

    Campuses use TC 971 for extensions. See IRM 5.14.5.5(12).

  1. Lien filing is not required.
  2. Do not issue Notices of Intent to Levy, Notice of Hearing (LT 11 or Letter 1058DO) nor levies during granted extension periods, unless collection is in jeopardy or at risk.
    Note:

    This applies even if taxpayers are given deadlines within the extension period and these deadlines are not met.

    Example:

    A revenue officer gives the taxpayer a 60 day extension of time to pay and 30 days to have all federal tax deposits current. The taxpayer has not made all the current tax deposits by the 31st day. Enforcement is not appropriate until after 60 days pass, unless collection is in jeopardy or at risk.

  1. Extensions may be granted in person, by telephone or by correspondence.
  2. When an extension is granted on a balance due account, document the case history with the terms of the extension and levy source information. On ACS cases, telephone the ACS call site and provide the extension and levy source information so the call site can update the taxpayer’ s records.
  3. For extensions up to 75 days, on accounts not yet in status 22 or 26, request input of command code STAUP via Form 4844 for the payment due date plus four cycles.(Maximum STAUP is 15 cycles.) Specify next status 58 except when the current status is 58, then specify next status 22. In addition, request input of levy sources.
    Example:

    The taxpayer is granted an extension of time to pay of 7 weeks. Request input of STAUP for 7 cycles (weeks) plus 4 additional cycles (weeks.) Total STAUP requested: 11 cycles.

  1. For STAUPs of 9 to 15 cycles, an open control base must be maintained on the module. If not opened, the status change may occur earlier than scheduled. Record the following in the remarks section of Forms 4844:

    Approved Extension of Time to Pay — Input STAUP 58 (or 22), XX (09 to 15) cycles. Note: Please open control base on module to prevent early release of STAUP—See IRM 2.4.28 for input criteria.

  1. Prior to the expiration of the original STAUP request an additionalSTAUP.
    Reminder:

    The maximum number of cycles for STAUP is 15 (105 days). Request an open control base on the module when the second STAUP is 9 or more cycles.

  1. Notice status taxpayers with extensions of time to pay should be advised to send payments to Campuses with copies of their most recent notices from the IRS. On ACS cases, advise taxpayers to send payment to the ACS address at the Campus.
  2. Hold extension of time to pay balances due in inventory until due dates. These are not installment agreements.
    Reminder:

    Do not request input of TC 971 AC 063 or AC 043.

  1. Although extensions of time to pay are not installment agreements, and may not be input to status 60 by the field, they may be input to status 60 by Campuses, and TC 971 AC 063 is input on the tax modules. To determine if a non-field status 60 is an extension of time to pay, check IAGRE/IADIS. If the Agreement Locator Number (ALN) is 9999, the taxpayer was granted an extension of time to pay.
    Note:

    If taxpayers do not pay within the extension period, Campus will input TC 971 AC 163 before transferring cases to the field.

divider
© Copyright 2006 Accufirst Inc. All rights reserved.
TAXFIRM.COM IS A DIVISION OF ACCUFIRST® INC.
Disclaimer | Privacy Statement | Site Map | Contact