5.14.4. Withdrawals and Installment Agreements with Special Circumstances

(1) Purpose. This chapter discusses the installment agreement process for cases with special circumstances and withdrawals of installment agreement requests. As you use this chapter, remain alert for references to other resources, such as related IRMs and websites and access that guidance as needed to ensure a thorough understanding of topics. Specifically, IRM 5.14.4:

1. Discusses below deferral level taxpayers.

2. Describes procedures for installment agreements for multiple entities.

3. Discusses joint and several liability relief underIRC 6015.

4. Discusses considerations and procedures for withdrawals of installment agreements.

5. Establishes procedures for entering into installment agreements for restitution based assessments.

(2) Audience. These procedures and guidance apply to IRS Field Collection Revenue Officers and Group Managers.

(3) Policy Owner. The Director, Collection Policy is the policy owner of this IRM.

(4) Program Owner. Collection Policy, Case Resolution Alternatives (CRA) is the program owner of this IRM.

(5) Primary Stakeholders:

• Field Collection

• Independent Administrative Review

• Insolvency

• Appeals

• Taxpayer Advocate Service

(6) Program Goals. Installment agreements can be a viable case resolution for many delinquent accounts. By following the direction in this IRM section, employees can identify proper procedures for completing installment agreement actions for cases with special circumstances.

(1) Mailing of computer paragraph CP 522, Review Financial Condition, has been suspended.

(2) Taxpayers whose cases are monitored in Centralized Case Processing, either in status 60 or manually, may also be contacted to obtain updated financial information, but not by use of CP 522, Review Financial Condition.

(3) Before entering into installment agreements, schedule changes in monthly payment amounts based on anticipated changes in taxpayers’ ability to pay. (See IRM 5.14.1.4.4, Increases, Decreases, Varied Payment Amounts; Completing and Processing Installment Agreements).

(1) Notice status balance due accounts less than the amount specified in 5.16.1.2.5, Tolerance, may be input to installment agreement status for an unspecified period of time provided:

• agreements do not extend past the CSED, and

• taxpayers can make regular monthly payments.

(2) The agreements discussed in IRM 5.14.4.3 (1) may be taken if:

1. The liability includes the total amount outstanding, including accruals and currently not collectible accounts;

2. Equal monthly installments are required for IDRS monitoring; and

3. there are no other balances due.

(3) Prepare Form 433-D, Installment Agreement, or Form 2159, Payroll Deduction Agreement (levy source information is not required on these agreements), process per the guidance provided in IRM 5.14.9.4, Routine Installment Agreements. (See also IRM 5.14.9.3, IDRS Monitoring).

(4) In cases in which the payment would be less than ≡ ≡ ≡ ≡ , an alternative to an installment agreement (except guaranteed installment agreements) would be to:

1. request that the taxpayer adjust Form W-4, Employee’s Withholding Allowance Certificate, (following the procedures outlined in IRM 5.14.1.4.2(18)(a), Compliance and Installment Agreements, so the positive amount shown as being available for payments is instead used to increase current withholding; then

2. follow the instructions in IRM 5.16.1, Currently Not Collectible.

(5) Reporting Accounts Uncollectible: If, based on analysis of Collection Information Statements taxpayers are unable to make payments, consider reporting accounts uncollectible — see IRM 5.16.1, Currently not Collectible. Provide taxpayers with the address at the Campus where the taxpayer files returns (for mailing voluntary payments). Taxpayers who are unable to make payments generally should not be granted installment agreements.

(6) If taxpayers are able to make payments, but unable to fully pay all balance due accounts, then Partial Payment Installment Agreements may be considered (see IRM 5.14.2.1.1, Partial Payment Installment Agreement Requirements).

(1) Related entities can be included in one installment agreement. The agreement locator number will auto-populate on ICS to XX63, if there are no other conditions. The ALN ensures proper systemic monitoring of these agreements. For this type of IA , ensure the taxpayer entities are in filing and payment compliance IRM 5.14.1.4, Installment Agreement Acceptance and Rejection Determinations, prior to requesting the pending IA indicator (IRM 5.14.1.3(5), Identifying Pending, Approved and Rejected Installment Agreement Proposals on IDRS). When the pending IA indicator is present (TC 971 AC 043) on the entity and one of the taxpayers is not in compliance at the time the IA is ready to be granted, a recommendation for rejection can be given to the independent administrative reviewer regarding only the person or entity that is not in compliance, and the taxpayer that is in compliance may be granted an installment agreement (if appropriate). The following types of taxes may be combined in one installment agreement:

1. Taxes for two or more Form 1120S, U.S. Income Tax Return for an S Corporations, if they share the same sole officer.

2. A sole proprietorship’s taxes (on the sole prop.’s tax ID number) and the individual income taxes of the sole owner of the sole proprietorship.

3. Taxes for married couples, even if the taxes are owed individually.

(2) When a request for an IA involves an SSN and EIN (Sole Proprietor) or two SSN's, some years filed joint and some single, combine the aggregate unpaid balance of assessment (CC SUMRY) of all modules. Determine if the taxpayer meets the requirements to qualify for an IA. An IMF account and related BMF account must be included in one IA.

(3) Select the correct IA type based on the combined aggregate unpaid balance of assessments (SUMRY) of all the modules on the related entities. The correct IA type is based on the dollar threshold and type of tax governed by the IA type (Streamlined, IBTF-Express, IBTF-IA).

(4) For installment agreements on multiple entities:

1. Ensure the cross referenced identification number is entered when completing the IA on ICS by answering “Yes” to the question “Are there other TINs to be included with this installment agreement” to ensure proper input. Campuses will input agreements on the entity with the earliest CSED first.

   Note: ONLY make this election when the cross-referenced TIN has an unresolved Bal Due on IDRS.

2. Both agreements will cross- reference the related EIN or SSN using ALN (XX63). ALN (XX63) will be systemically included on the IA form by ICS (This ensures the accounts appear on the Installment Agreement Account Listings in the correct category.)

3. The primary taxpayer identification number (TIN) will dictate the Campus to which the agreement will be routed for input. Primary SB/SE TINs will be routed to SB/SE Campuses. Primary W&I TINs will be routed to W&I Campuses for monitoring.

4. The Campus that inputs the agreement will ensure that ALN XX63 is input on both agreements and the secondary TINs tax modules are input to IDRS status 63 and monitored at the same Campus.

5. Since the secondary agreement is monitored wherever the primary agreement is set up, this will sometimes result in SB/SE Campuses monitoring W&I cases and W&I Campuses monitoring SB/SE cases.

(5) These types of I/As , with an ALN of "xx63" cannot be systemically uploaded. ICS will block the input. Process this type of agreement by e-mailing the Form 433-D, Installment Agreement , to the appropriate CCP mailbox (see below) or mail it on a Form 3210, Document Transmittal, to CCP at Mail Stop 5-E04.114.

• Area Offices 21, 22, 23, 24, and 35 use *SBSE CCS GCP EAST1

• Area Office 25 use *SBSE CCS GCP WEST2

• Area Offices 26, 27 use *SBSE CCS GCP WEST1

(6) For certain liabilities assessed in the name and EIN of an LLC, different single member owners (SMOs) may be liable for separate tax periods assessed in the same name and EIN. See IRM 5.1.21, Collecting from Limited Liability Companies. If multiple SMOs are liable for different tax periods assessed in the same name and EIN separate installment agreements would be required for each taxpayer and should be established using the Manually Monitored procedures in IRM 5.14.9.5, Manually Monitored Installment Agreements (MMIA).

(7) Ensure a TC130 is input for the appropriate Social Security Number(s).

(1) In situations in which one joint taxpayer has requested relief from joint and several liability under IRC 6015, if the non-requesting spouse requests an installment agreement, and there is an unreversed TC 971 AC 065 on any balance due module or a MFT 31 has been established, then:

1. Follow normal procedures to determine if the taxpayer qualifies for an installment agreement and include all modules (even the modules with the unreversed TC 971 AC 065) in calculating if the proposed payment amount would full pay the liability before the Collection Statute Expiration Date (CSED). SeeIRM 5.14.1.4, Installment Agreement Acceptance and Rejection Determinations.

2. If the taxpayer qualifies for an installment agreement, make sure all balance due accounts are included, including those with TC 971 AC 065, and establish the installment agreement using Manually Monitored procedures in IRM 5.14.9.5, Manually Monitored Installment Agreements (MMIA).

(2) If the spouse filing a claim requests an installment agreement and there is an unreversed TC 971 AC 065 on any balance due module, then:

1. Follow normal procedures to determine if the taxpayer qualifies for an installment agreement and include all modules (even the modules with the unreversed TC 971 AC 065) in calculating if the agreement would fully pay the liability before the CSED.

2. If the taxpayer qualifies for an installment agreement, include all modules except those with an unreversed TC 971 AC 065 in the agreement itself.

Note: Use of the PPIA procedures provided in IRM 5.14.2.1.1, Partial Payment Installment Agreement Requirements , is also an option if the taxpayer is unable to fully pay all balance due accounts through an installment agreement.

3. Establish the agreement using Manually Monitored procedures in IRM 5.14.9.5, Manually Monitored Installment Agreements (MMIA).

4. If after such agreements are in effect claims filed under section 6015 are denied and the requesting spouse requests addition of the balance due account(s) to installment agreements, request this on Form 4844, Request for Terminal Action.

5. Note on Form 4844, Request for Terminal Action, that the agreement for the case may now be monitored by IDRS if no other conditions exist that are mentioned in IRM 5.14.9.3(3), IDRS Monitoring.

(3) To input pending installment agreement codes (TC 971 AC 043) or installment agreement codes (TC 971 AC 063), when an unreversed TC 971 AC 065 already exists on a tax module:

1. reverse the TC 971 AC 065 using TC 972 AC 065;

2. input TC 971 AC 043 or AC 063; and

3. re-input TC 971 AC 065 (after the pending or installment agreement code is on the tax module)

(1) Taxpayers may withdraw installment agreement requests either verbally or in writing.

(2) Requests to withdraw an installment agreement request are only applicable to pending installment agreements, and typically requested when another case closing action is determined to be the appropriate case resolution (Full payment, OIC, CNC, etc.)

(3) In the case of a joint assessment, if the withdrawal is only requested by one spouse, the revenue officer should determine the intent of the other spouse if other than a full pay resolution. If the other spouse wishes to continue with the IA request, the accounts should be mirrored so that separate collectibility determinations can be made.

(4) Exhibit 5.14.4-1 provides the format for withdrawal of installment agreement requests. This format must be used regardless of whether requests for withdrawal are verbal or written.

(5) Verbal requests are effective five (5) calendar days from the day they are received unless a written confirmation of a verbal request is received within the five (5) day period. Taxpayers should be advised that by withdrawing their installment agreement request, appeal rights with respect to that pending installment agreement are extinguished, however, taxpayers can propose a new installment agreement at any time.

(6) Include the reason for the withdrawal request in the appropriate part of the form.

(7) If, after a verbal request for withdrawal, written confirmation is not received, document the case file as to how the request for withdrawal occurred.

(8) Requests for Installment agreements (pending IAs) are considered withdrawn (i.e., withdrawals are effective):

1. upon receipt of written requests for withdrawal, or

2. five (5) calendar days after a verbal request for withdrawal.

(9) Withdrawals should not be solicited by contact employees, but questions may be asked to clarify misunderstanding of taxpayers’ statements.

(10) Request input of TC 972 AC 043 (if a TC 971 AC 043 was previously input) on the effective date of the withdrawal. If the case has already been input into installment agreement status, then:

• request input of TC 971 AC 163 instead, and

• ensure accounts are removed from status 60 and the appropriate collection status is input.

(11) If the installment agreement request was a joint request on a jointly filed return, both taxpayers must sign one request or separate requests for withdrawal for the request to be honored.

(12) No independent review is required in the case of withdrawals. (See IRM 5.14.9.7(17), Independent Administrative Review after Recommended Rejection of Installment Agreement Requests).

(1) For background information on RBAs see IRM 5.1.5.15.3, Restitution Based Assessments.

(2) Revenue Officers (RO) may receive an Other Investigation (OI) from an Advisory Probation Liaison (APL) or a balance due module assignment to conduct a field investigation on a RBA.

(3) Civil assessments with associated RBAs may be received in any Collection work stream (Field, Campus, Automated Collection System) but may only be worked by revenue officers.

(4) IAs for RBAs can only be considered if the proposed IA will result in the full payment of the RBA within the terms of the IA and by the Collection Statute Expiration Date (CSED). Any open civil assessment should be included in the IA, even if the payment agreement won’t result in full payment of those civil assessments. CCP will determine if the IA is a Partial Payment Installment Agreement (PPIA) once the RBAs are paid in full.

(5) IAs that include RBAs should only be established by ROs. If there is an open Conditions of Probation case, the RO should coordinate the establishment of the IA with the APL.

(6) In the event the taxpayer’s ability to pay will not result in the full payment of the RBA, Manually Monitored Installment Agreements (MMIAs) for civil assessments (including PPIAs) can be established exclusive of RBA assessments (that is, the RBA is not included as part of the IA) in cases where the taxpayer’s income/expense analysis shows an ability to pay above the allowable expenses (which will include the court ordered restitution payment). The RBA modules should be reported as Currently Not Collectible using closing code 32.

(1) This section relates to actions required when establishing installment agreements which include an MFT 74 and/or MFT 76 module.

(2) MFT 74 identifies the tax module in which an adjustment for Form 5500, Annual Return/Report of Employee Benefit Plan, is to post. Form 5550 concerns compliance with qualification provisions. For Form 5500 penalties (e.g., late filing), see IRM 20.1.8.3 (04-17-2009) Employee Plans (EP).

(3) MFT 76 identifies the tax module in which an adjustment for Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, is to post. Form 5330 is used to report and pay the excise tax related to employee benefit plans under several IRC provisions. The largest assessments usually relate to inadequate funding of employee pension plans. A tax of 10% [4971(a)] of the underfunded amount may apply each year. A tax of 100% [4971(b)] can be imposed in certain cases. The tax may be self-reported on Form 5330, or identified by IRS in an Examination proceeding.

(4) Currently, due to programming limitations, the systemic input of certain transaction codes to a MFT 74/76 module is not possible due to the 3 digit plan identifier associated with these assessments. Automated systems do not recognize the identifier number. Notices requesting payment are sent when the tax is assessed and every time interest is updated, but the cases do not move beyond status 21. Sometimes no status is reflected on IDRS, just the assessment.

(5) Research of these modules requires a specific format which include:

(6) IAs which include MFT 74 or 76 cannot be systemically established on IDRS; they must be processed following MMIA procedures. See IRM 5.14.9, Routine and Manually Monitored Installment Agreements, Independent Reivew and Appeals. Clearly identify the IA as"MMIA - MFT 74/76" in red on the top of the IA.

(7) If the entity has other assessments (i.e. MFT 01, 02, 10, etc.) and those modules will not be fully satisfied (taxpayer placed in a Partial Payment IA), do not create a separate IA for CCP manual monitoring. If the taxpayer has a systemically monitored IA that will result in full payment of the other assessments, create a separate IA for manual monitoring in CCP. Clearly document the 433D and the ICS history that both a systemic and manually monitored IA exist and that payments will post to the non-MFT 74/76 assessments until full payment is received.

(8) Request input of a TC 971, AC 063 on each MFT 74/76 module at the time the manually monitored IA is forwarded to CCP.

(9) If a Notice of Federal Tax Lien is required, follow the instructions outlined in the NFTL section of this Interim Guidance, which will be updated in 5.12.7.7.6.