Installment Agreement Requirements


#1

Can anyone please clarify which types of installment agreements have the requirement that another installment agreement must not have been taken in the past five years? Are some types of installment agreement exempt from this rule?

Thank you!


#2

Hey Gary-
There is no 5 year IA (installment agreement) rule as stated in your question. However, with that being said, the issues that could cause challenges to an approved IA are: the status of repeater (previously defaulted), pyramiding, and/or does not qualify financially due to ability to pay in full/equity in assets. A good reference would be the chart in IRM Exhibit 5.14.1-5 (Installment Agreement Table).
Your indication of 5 years, makes me think you may be referring to an OIC “installment agreement” aka periodic payment offer (allowing for up to 24 months of payments). As with all OIC’s, taxpayers are required to remain in compliance for 5 years subsequent to acceptance.
Hope this helps,
Jeff


#3

Jeff, I will review your message in detail, along with the chart in the IRM. But I have seen reference to this 5 year rule in several places. For example, I am looking at the handout for a CPE class that I took and it states this with respect to both Guaranteed and Streamlined installment agreements. It does not make this statement regarding “regular” installment agreements.

Your thoughts, please?


#4

IGary,

It has been my experience that the IRS will enter into an Installment Agreement with a taxpayer if the taxpayer’s filing obligations are current AND the IRS has been provided the requesite financial information per the amount of liability.

If you have any questions please let me know.

Keith


#5

Gary-
Great call!!! I looked back at the IRM (specifically IRM 5.14.5.3.1.f) and it specifically states:" have not entered into an installment agreement during any of the preceding five taxable years" for a Guaranteed IA. Reviewing the requirements for a streamlined, I do not see any reference to the five year requirement. Does your CPE material give you any specific reference to the requirement for streamlined IA’s?

I wholeheartedly apologize for the mis-information. As a prior RO, I never dealt with guaranteed IA’s, as all of my cases were over $100,000K. I promise to do a better job researching before responding in the future.
Thanks,
Jeff


#6

Thank you, Jeff!

I did verify that one CPE class handout that I have does say that guaranteed and streamlined installment agreements do have the five year rule. But there is no source given. It does not say this about regular installment agreements.

Anybody know the story about this?