5.14.1. Securing Installment Agreements

(1) Purpose: This section discusses the overall installment agreement (IA) process and considerations for whether to accept or reject an IA proposal. While many topics are touched upon in this section, comprehensive guidance about all of them cannot be included here. As you use this section, remain alert for references to other resources, such as related IRMs and websites. Access that guidance as needed to ensure a thorough understanding of topics. This IRM provides guidance, and you will be able to:

1. Identify taxpayer rights with respect to IAs.

2. Prescribe pending IA criteria and when to input pending status to IDRS.

3. Discuss considerations with respect to the acceptance and/or rejection of IAs.

4. Describe compliance requirements and Notice of Federal Tax Lien considerations when granting IAs.

5. Establish processing procedures for completed IAs.

6. Discuss restrictions on levies during the IA process.

(2) Audience: These procedures and guidelines apply to IRS Field Collection revenue officers and group managers.

(3) Policy Owner: 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 (IAR)

• Insolvency

• Independent Office of Appeals (Appeals)

• Taxpayer Advocate Service (TAS)

(6) Program Goals: IAs can be a viable case resolution for many delinquent accounts. By following the direction in this IRM section, employees can ensure that they afford taxpayers the rights to which they are entitled by properly identifying and processing pending IA proposals, and make the correct determination as to whether to accept or reject the taxpayer’s IA proposal based on the facts and circumstances of each case.

(1) Demand full payment or partial payment of the balance due if the taxpayers have the means to pay from income or equity in assets. Encourage the taxpayers to pay the tax liability as quickly as possible.

(2) If the taxpayers qualify for a Guaranteed, Streamlined, or In Business Trust Fund Express agreement, and request such an agreement, even if the taxpayers can pay the liability in full (see IRM 5.14.5, Streamlined, Guaranteed, and In-Business Trust Fund Express Installment Agreements), the request will be granted.

(3) If they do not qualify for Guaranteed, Streamlined or Express processing, secure a complete Collection Information Statement (CIS). See IRM 5.1.10.3.2, Effective Initial Contact.

(4) Taxpayers with aggregate individual income tax liabilities of $10,000 or less (excluding penalties, interest, and additions) may qualify for guaranteed IAs if the taxpayers meet all requirements. See IRM 5.14.5.3, Guaranteed Installment Agreements, for additional information. Taxpayers with an aggregate unpaid balance of assessment (the CC SUMRY balance) equal to $50,000 or less may qualify for Streamlined Agreements. The unpaid balance of assessment includes tax and assessed interest and penalties. It does not include accrued interest and penalty. See IRM 5.14.5.2, Streamlined Installment Agreements, for additional information.

(5) There are various methods for making monthly installment agreement payments.

(6) Encourage the taxpayers to use one of the following electronic or credit card methods of payment rather than check or money order:

1. Electronic Federal Tax Payment System (EFTPS) – taxpayers will select the "payment-due with IRS notice" payment type for posting to Master file with a Transaction Code (TC) 670. EFTPS has the ability to schedule payments up to 12 months in advance for individual taxpayers and up to 4 months in advance for business taxpayers. The taxpayer must initiate payments by sending instructions to EFTPS. See IRM 21.7.1.4.8.1, Electronic Federal Tax Payment System (EFTPS), for complete instructions.

2. Direct Debit installment agreements - If the taxpayers maintain a checking account, you should encourage them to take advantage of the direct debit installment agreement. See IRM 5.14.10.4, Direct Debit Installment Agreements, for Direct Debit procedures.

3. Payroll Deduction installment agreements - If the taxpayers will not agree to a direct debit installment agreement, encourage them to take advantage of the payroll deduction agreement. See IRM 5.14.10.2, Payroll Deduction Agreements, for Payroll Deduction procedures.

4. Credit Card installment agreement payment, see IRM 21.2.1.48.4, Payment by Credit Card, Debit Card or Digital Wallet (General), for procedures for paying by credit card.

5. Payment by check or money order - If payments are made by check, they should be payable to: "US Treasury". However, checks made out to "Internal Revenue Service" or "IRS" will be processed.

6. Direct Pay is a free service that allows taxpayers to make electronic payments directly to the IRS from their checking or savings accounts. See IRM 21.2.1.48.2, IRS Direct Pay, for further information.

7. Individual Online Account (IOLA) is an online system that allows taxpayers to securely access their IMF account information through https://www.IRS.gov/account. The Payment Options page provides taxpayers with options to make an online payment now. See IRM 21.2.1.62(8).

   Note: Cases assigned to field collection that are in ST 26 cannot set-up a payment plan in Online Payment Agreement (OPA) or Individual Online Account (IOLA)

   .

   Note: Third-party payment processors charge a processing fee for payments made by debit or credit card or digital wallet. See IRM 21.2.1.48.4, Payment by Credit Card, Debit Card or Digital Wallet (General).

(7) Certain taxpayers who enter into IAs and file timely will have the failure to pay penalty reduced from a half to a quarter percent per month for any month in which an installment agreement is in effect until the 25% maximum aggregate rate is reached. (IRM 5.14.1.3 describes necessary inputs for TC 971 action codes.) Input of TC 971 AC 063 reduces failure to pay penalty from one half (0.5) to one quarter (0.25) percent per month if all of the following conditions are met:

1. The IA was entered into on or after January 1, 2000.

2. The balances are due from an individual (whether IMF or BMF, due on income, employment or excise tax returns).

3. The tax return(s) was timely filed, including extensions.

4. No CP 504, LT11, or Letter 1058 was sent (indicated by a TC 971 AC 069), increasing the failure to pay penalty from one-half (0.5) to one (1) percent.

   Note: If agreements are terminated, penalties increase to one-half (0.50) percent. The input of TC 971 AC 163 will increase the penalty rate from one-quarter (.25) percent to one-half (.50) percent. The penalty rate is not recalculated for the months during which the IA was active. For more information on the reduced penalty rate, refer to IRM 20.1.2.3.8.1.2, 1/4 Percent Penalty Rate - IRC 6651(h).

   Note: Payments on the balance are applied to the tax first, then any penalty, then interest.

(8) See IRM 5.14.7.5, Payments on Trust Fund Accounts During Approved In-Business Trust Fund Installment Agreements, paragraph (1)(a) — (d), regarding designation of payments during IAs.

(9) On February 9, 2018, the President signed into law the Bipartisan Budget Act (BBA) of 2018. The Act amended IRC 6159 to provide certain limitations to IA user fees. The Act’s amendments to IRC 6159 apply to IAs entered into on or after April 10, 2018.

• User fees for IAs may not exceed the amount of such fee as in effect on February 9, 2018.

• IA user fees will be waived for low-income taxpayers who agree to make electronic payments through a debit instrument.

  Note: At this point, the only mechanism the IRS has in place in which the taxpayer may agree to make electronic payments is through a debit instrument is a DDIA.

  Note: CC IAGRE has been programmed to waive the user fee on a DDIA when the taxpayer meets the low-income threshold.

• IA user fees will be reimbursed to low-income taxpayers that are unable to make electronic payments through a debit instrument upon completion of the IA.

  Note: See IRC 6159(f) to review the full text.

• For IA user fee purposes, taxpayers are low-income if their adjusted gross income (AGI) for the most recent year is at or below 250 percent of the Federal Health & Human Services Guidelines (FHHSG).

(10) The purpose of an IA user fee is for the IRS to recover the costs of administering the IA program. 31 United States Code (USC) 9701 - as interpreted by the Office of Management and Budget (OMB) Circular No. A-25 - provides the authority for the imposition of user fees. User fees are imposed for services pertaining to the entering into and the restructuring or reinstating of an installment agreement. See 26 CFR 300.1, Installment agreement fee and 26 CFR 300.2, Restructuring or reinstatement of installment agreement fee. Current User Fee Rates:

(11) Individual taxpayers qualified as low-income (for purposes of the IA user fees) get a reduced fee of $43. This $43 low-income fee may be waived or reimbursed if certain conditions are met. The low-income fee of $43 may be charged to taxpayers based on the Reduced User Fee Indicator (RUFI) on Master File, as indicated by a RUFI>1. Advise the taxpayers that they are low-income, for IA user fee purposes, if their adjusted gross income (AGI), as reported on their most recently filed tax return, that is at or below 250 percent of the FHHSG, the user fee will be reduced. Advise the taxpayers that if they feel that their AGI would qualify them for low-income status, they may apply using Form 13844, Application For Reduced User Fee For Installment Agreements, available at www.irs.gov or by phone at 1-800-829-3676. Low-income status for IA user fees applies only to individuals (not partnerships or corporations). Taxpayers will be informed of their right to apply for low-income status in the installment agreement acceptance letter. Inform taxpayers that Form 13844 must be submitted within 30 days of the date on the IA acceptance letter. The contact employee will not make the determination of whether taxpayers qualify for low-income status; that determination will be made when the Form 13844, Application For Reduced User Fee For Installment Agreements, is processed and validated. Once the IRS determines that taxpayers qualify as low-income, any amount of the fee collected in excess of $43 will be credited against taxpayers' Internal Revenue Code liabilities and thereby will reduce the amount of interest and penalties that might otherwise accrue.

(12) When discussing IAs, inform taxpayers that:

1. Penalties and interest continue to accrue on unpaid liabilities. Provide taxpayers with current percentage amounts and interest rates. If taxpayers request further information regarding penalties and interest,IRM 20.1, Penalty Handbook, provides rates for IRC 6651(a)(1), "failure to file" and IRC 6651(a)(2), "failure to pay" additions to tax. SERP website provides interest rates and tables: SERP - Interest Rates.

2. A Notice of Federal Tax Lien (NFTL) may be filed in certain circumstances. IRM 5.14.1.4.3, Notice of Federal Tax Lien and Installment Agreements, provides instructions on determining when to file a request for an NFTL.

   Note: The NFTL will not be filed on any individual shared responsibility payment (SRP) liabilities (MFT 35/Mirrored MFT 65) under the Affordable Care Act (ACA).

3. There is the possibility of a levy if the agreement is terminated.

   Note: A levy will not be issued on any individual shared responsibility payment liabilities (MFT 35/Mirrored MFT 65) under the Affordable Care Act.

4. Current returns for taxes must be filed and current deposits paid before an IA can be approved and the taxpayer must remain tax compliant for the entire term of the IA, or they will default on the agreement. If applicable, remind the taxpayer of the obligation to make estimated tax payments to avoid accruing new tax liabilities, that would default their agreement.

5. Federal tax refunds will be offset to pay any overdue balances. See IRM 5.14.1.4.2(19)e; and,

6. Taxpayers have the right to appeal proposed terminations of IAs, terminations of IAs, proposed rejection of IAs or rejection of IAs. Refer to IRM 5.14.9, Routine and Manually Monitored Installment Agreements Dispositions, Independent Review and Appeals, when considering terminating an IA.

7. The CSED will be suspended while the IA is pending, for 30 days following the rejection or termination of an IA, and for the period that Appeals is considering the rejection or termination of an IA.

(13) In accordance with the law, each year the IRS mails Computer Paragraph CP 89 and CP 289 , "Annual Installment Agreement Statement," to every IA taxpayer. The statement provides:

• The dollar amount of the beginning account balance(s) due

• An itemized listing of payments

• An itemized listing of penalties, interest and other charges

• The dollar amount of ending account balance(s) due

(14) IRC 6502(a)(2)(A) provides that statutory periods for collection may be extended in connection with granting IAs. However, it is the policy of the IRS that CSED extensions are permitted only in conjunction with Partial Payment Installment Agreements (PPIAs) and only in certain situations. See IRM 5.14.2.2.3, Waiver Procedures for Partial Payment Installment Agreements.

(1) Proposals to enter into IAs may result from letters, phone contacts, voice mail, e-mail, or other communications between taxpayers and IRS personnel.

(2) All taxpayers have the right to request IAs. Requests for IAs, including those on unassessed/pre-assessed modules, will be noted in the ICS case history, and must be identified on IDRS within 24 hours.

(3) The following transaction codes (TC) and Action Codes (AC) will be used:

• Pending agreements: TC 971 AC 043 — for requests not immediately approved

• Approved agreements: TC 971 AC 063 — for immediately approved requests

(4) These inputs must be made within 24 hours of the request for, and identification of, IAs or pending agreements. These codes prevent enforcement (levy) actions. See IRM 5.14.1.5, Levy Restrictions and Installment Agreements. The inputs must be generated for the appropriate periods using the ICS application by selecting the "COLLECTION ACTIVITIES" menu from the Case Summary screen; then selecting "INSTALLMENT AGREEMENT"; and then selecting the proper code for input (either "GENERATE TC971/972 AC043" or "GENERATE TC971 AC063").

(5) In order for the IRS to process an IA request (to identify a pending IA), the taxpayer must provide specific information. Also, if the information in (a) through (d) below is provided, but it is determined that the agreement request was made to delay collection action, accounts should not be identified as being in pending IA status. See IRM 5.14.3.3, Installment Agreement Requests Made to Delay Collection Action. To identify accounts as pending IAs, taxpayers must:

1. Provide information sufficient to identify the taxpayer: generally, the taxpayer’s name and taxpayer identification number (TIN). If a taxpayer furnishes a name, but no TIN, and the taxpayer ’s identity can be determined, then pending status should be identified.

2. Identify the tax liability to be covered by the agreement.

3. Propose a monthly or other periodic payment of a specific amount.

4. Be in compliance with filing requirements, see IRM 5.14.1.4.2, Compliance and Installment Agreements.

   Note: If requesting a delinquent return(s) from the taxpayer, advise the taxpayer that they do not have a pending IA and that they will have to make a subsequent IA proposal and meet all of the pending IA requirements at that time in order to establish a pending IA (and the need for the input of a TC 971 AC 043).

   Note: If the RO secures an unpaid return from the taxpayer and creates a balance due module (pre-assessed) on ICS and the taxpayer wants to include the created balance due return in an IA proposal and meets all of the pending IA requirements at that time to establish a pending IA, request input immediately (within 24 hours.)

   Note: Restitution Based Assessment (RBA) modules do not qualify for pending IA, if the proposed payment will not fully satisfy the RBAs by the CSED. SeeIRM 5.14.4.6, Establishing Installment Agreements on Restitution Based Assessments and related Civil Assessments - Overview.

   Note: The IRS may not accept IA proposals when they are not considered processable (unless the IA request meets Guaranteed IA criteria; see IRM 5.14.5.3, Guaranteed Installment Agreements). An IA is not considered to be "pending" until it has been accepted for processing. See 26 CFR 301.6159-1(b)(2). This means that the taxpayer is not already pursuing another case resolution alternative. If so, an IA request is not processable, and it is not a "pending" IA request.

(6) A request for an IA on post-petition liabilities is non-processable when a taxpayer is in bankruptcy. See IRM 5.9.4.20.1, IA Requests For Post-Petition Liabilities Submitted During Bankruptcy.

(7) A request for an IA on liabilities contained in a pending or accepted OIC is non-processable. See IRM 5.19.1.3.5(13), For Other Account Issues Requiring Referrals or Redirect, and IRM 5.8.1, Offer in Compromise (OIC) Procedures.

(8) Requests that meet the criteria in IRM 5.14.1.3, Identifying Pending, Approved, and Rejected Installment Agreement Proposals on IDRS, paragraphs (4)(a) through (d), on IDRS will be identified as pending IAs even if taxpayers are not in compliance with:

• Estimated (ES) payment requirements; or

• Federal tax deposit (FTD) requirements,

(9) If a taxpayer does not provide all of the information in IRM 5.14.1.3, Identifying Pending, Approved, and Rejected Installment Agreement Proposals on IDRS paragraphs, (4)(a) through (d), ask the taxpayer for the missing information. For example, if no payment amount is specified, ask how much can be paid per month. A monthly payment amount must be specified for the account to be marked "pending". Advise the taxpayer that the IA will not be considered pending until the information is received to perfect the IA request, and explain the potential consequences for failing to meet the deadline for the actions necessary to perfect the IA request.

(10) Acceptance or rejection of proposed agreements is based on analysis of Collection Information Statements. See IRM 5.14.1.4, Installment Agreement Acceptance and Rejection Determinations.

(11) The following TCs and ACs will be input on ALL taxpayer modules containing TC 971 AC 043 to indicate acceptance or rejection of proposed agreements:

1. For approved agreements: request that TC 971 AC 063 be input to IDRS on ALL taxpayer modules.

   Note: Agreements approved on ICS systemically input the TC 971 AC 063 to IDRS, so no action is necessary for those agreements.

2. For Rejected Proposals: request reversal of TC 971 AC 043 forty-five (45) days after the rejection is communicated to the taxpayer, unless a timely appeal is received. The date of the reversing transaction (TC 972 AC 043) should be thirty (30) days from the date the rejection was communicated to the taxpayer.

3. For Appeals: during appeals, TC 971 AC 043 remains on all modules. If Appeals sustains a rejection, input TC 972 AC 043 thirty days (30) after a rejection is communicated to the taxpayer. If Appeals grants an IA, follow the procedures above for approved agreements.

   Reminder: Request input of the TC 972 AC 043 timely and with the correct transaction date to ensure the CSED is recalculated correctly.

(12) To identify trust fund recovery penalties as pending or approved IAs, the balance due account must have an:

• Assessed liability or liabilities

• Executed Form 2751, Proposed Assessment of Trust Fund Recovery Penalty, from the taxpayer

• Approved Form 4183, Recommendation re: Trust Fund Recovery Penalty Assessment, and issuance of Letter 1153, Proposed Trust Fund Recovery Penalty Notification Letter

(13) Examples of "Pending" and "No Pending (agreement)" are in IRM 5.14.1.4, Installment Agreement Acceptance and Rejection Determinations and the two charts below.

(1) If the taxpayers are currently unable to fully or partially satisfy balance due accounts, and an IA will fully satisfy the balance due accounts (or accounts included in agreements provided byIRM 5.14.2.2, Overview), then IAs should be considered.

(2) If the taxpayers do not qualify for Guaranteed, Streamlined or In-business Trust Fund Express IAs, determine a plan for resolving the balance due accounts based on the Collection Information Statement (CIS) and supporting documentation provided by the taxpayer, see IRM 5.1.10.3.2, Effective Initial Contact, and IRM 5.15.1, Financial Analysis Handbook.

(3) There are no minimum nor maximum dollar limits for the amount of a liability that may be included in an IA.

(4) Generally, IAs should reflect taxpayers’ ability to pay on a monthly basis throughout the duration of agreements:

1. Analyze the income and expenses to determine the amount of disposable income (gross income less all allowable expenses) available to apply to the tax liability.

2. Deviations from the ALE standards must be justified when determining a monthly IA amount. To allow these expenses, supporting documentation or credible, verbal testimony are required and must be documented in the ICS case history.

3. Analyze assets that may be available to resolve the balance due accounts. See IRM 5.14.1.4(5) for more information about economic hardship situations.

4. If the taxpayers do not agree to payment amounts, or to increases, inform them that these and other issues, see IRM 5.14.1.4(6) through (9) may be discussed with the next level of management.

5. Employees may choose to bring managers into discussions to assist in reaching agreements.

6. If agreements cannot be recommended for approval, inform taxpayers that their requests are pending and that rejection of the request will be recommended, and refer the case for IAR. Advise the taxpayer their IA proposal will be recommended for rejection and if sustained, they will have appeal rights.

(5) If the taxpayers have equity in assets that could be used to fully or substantially satisfy balance due accounts, explore the possibility of liquidating or borrowing against those assets as determined in guidance found in IRM 5.15.1.3, Analyzing Financial Information, unless:

• It imposes an economic hardship situation as defined in IRM 5.15.1.2(16), and 26 CFR 301.6343-1(b)(4), or

• They qualify for guaranteed or request and qualify for streamlined or Express agreements, and the IA is appropriate based on the facts and circumstances of the case, see IRM 5.14.5, Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements.

(6) Given the various options available for satisfying balance due accounts, consider:

(7) Streamlined or In-Business Trust Fund Express IAs may be granted if taxpayers make a payment on balance due accounts that reduces the unpaid balance(s) of assessments (UBAs) to amounts that fit streamlined or In-Business Trust Fund criteria.

(8) If an analysis of the taxpayer’s financial condition shows taxpayers cannot pay but:

• They insist on wanting to make payments, consider closing the account as CNC and advise the taxpayer they are not required to make payments while in CNC.

  Note: Taxpayers have the option to make voluntary payments when possible and/or submit an Offer in Compromise.

• They choose to proceed with an IA, and the proposed amount will fully pay the balance due account(s) within the collection statute (and waiver period if appropriate), establish the IA and prepare a backup Form 53, Report of Currently Not Collectible Taxes, along with the IA in case of eventual default and termination. See Exhibit 5.14.1-2.

(9) If analysis of the taxpayer’s financial condition shows a liability cannot be collected in full through an IA, discuss the possibility of a PPIA, an Offer in Compromise (OIC), or a CNC determination with the taxpayer. See IRM 5.8, Offer in Compromise, and IRM 5.14.2.2.1, Partial Payment Installment Agreement Requirements. If the taxpayer agrees with the alternative resolution of CNC or OIC, secure the taxpayer’s consent to withdrawal from the IA in writing or verbally. Document the ICS case history with the taxpayer's agreement with the alternative resolution and request input of a TC 972 AC 043. Refer to IRM 5.14.4.5, Withdrawal of Installment Agreement Requests, when there is a pending IA, and the taxpayer seeks an alternative method of collection to resolve the account (e.g., OIC, CNC, etc.).

(10) See IRM 5.14.9.7, Independent Administrative Review after Recommended Rejection of Installment Agreement Requests, regarding IAR if IA requests are recommended for rejection.

(11) See IRM 5.14.9.7(14), Independent Administrative Review after Recommended Rejection of Installment Agreement Requests, regarding consideration of revised proposals received during the rejection appeal period.

(12) See IRM 5.11.1.3.2, Required Notices, and IRM 5.10.1.5.2, Alternative Methods of Collection, if the taxpayers qualify for IAs or OIC but:

• Do not submit or request one

• Do not agree to an acceptable payment amount

  Note: Also see IRM 5.14.3.2, Setting Deadlines and Receiving Payments.

(13) For agreements that require no managerial approval, see IRM 5.14.5.2, Streamlined Installment Agreements, IRM 5.14.5.3, Guaranteed Installment Agreements , and IRM 5.14.5.4, In-Business Trust Fund Express Installment Agreements. For agreements that require management approval, see IRM 5.14.7.3, Installment Agreements Involving Limited Liability Companies, IRM 5.14.7.4.2, Approval and Monitoring, and IRM 5.14.9.2, Managerial Approval.

(1) No levy may be made on taxpayer accounts:

1. While requests for IAs are pending.

2. While IAs are in effect.

3. For 30 days after requests for agreements are rejected.

4. For 30 days after agreements are terminated.

5. While a timely appeal of a default, termination or rejection is pending or unresolved.

   Note: Criteria for identifying "pending" agreements are in IRM 5.14.1.3.

(2) Levies may be served during the periods described in IRM 5.14.1.5(1) above:

1. If the taxpayers waive the restriction in writing (see Exhibit 5.14.1-3).

2. If collection is in jeopardy (i.e., if a condition allowing a jeopardy assessment exists.) In these situations CP 523, Notice of intent to levy Intent to terminate your installment agreement, (Letter 2975, Notice of Defaulted Installment Agreement Under IRC 6159(b), for MMIAs) is not required. Unless notice of the right to appeal was previously provided, the taxpayers must be notified of their appeal rights after jeopardy levies. See Policy Statement P–4–88 found in IRM 1.2.1.5.27, Policy Statement 4-88, Jeopardy assessments to be used sparingly and assessment to be reasonable in amount, for a list of conditions under which a jeopardy assessment will be made. See also IRM 5.11.1.4.8, Pending & Active Installment Agreements, for approval levels for jeopardy levies. The Approval level depends on whether the notices described in IRM 5.11.1.3.2, Required Notices, were sent, and if required waiting periods have passed.

3. For balance due accounts not included in current IAs, the new tax periods are not affected by the appeal period for defaulted IAs.

   Caution: In this context, "current" IAs include those in IDRS status 64 (default) because they remain in status 60 on Master File for the 13 cycles they are in status 64 on IDRS (until terminated and removed from status 60). Also, CDP notices and time frames must be provided to taxpayers on all balance due accounts before levies are served. See IRM 5.14.2.2.1 (regarding partial payment installment agreements) andIRM 5.11.1.3 (regarding pre-levy actions).

   Example: The taxpayer has an IA for payroll taxes for the periods ending September 30, 2020, and December 31, 2020. The period ending March 31, 2021, is not included in the IA and now has a balance due and all appropriate due process notices were mailed. The default Letter 2975 has been sent on the periods in the IA, but 90 days have not passed. In this example, although levies may not be served for those tax periods included in the agreement, levies may be sent to levy sources to collect on the balance due for the period ending March 31, 2021.

(3) If an IA is identified as pending and a levy is outstanding, it may be released, but it is not required that such levies be released. If an IA is approved, and there is a levy outstanding, it must be released unless the agreement provides otherwise. If an outstanding levy will remain in effect during an IA, document this in the "Additional Conditions" block of the agreement form. See IRM 5.11.1.4.8, Pending & Active Installment Agreements.

(1) IRM 5.14, Installment Agreements, is primarily for use by Collection contact personnel. In addition, it is referenced by other functions for IA policy and procedures. This section provides cross-functional authority to grant IAs and references actions necessary in the IA process. Collection personnel should reference this section to learn about other functions’ IA authority and the types of assistance other functions may request.

(2) The authority to grant IAs has been extended to other contact functions within the IRS to improve one-stop service, reduce taxpayer burden, encourage voluntary compliance and utilize resources more effectively. The functions are: Appeals, Tax Exempt and Government Entities, Examination, Taxpayer Advocate Service, Submission Processing, and Field Assistance.

(3) Multi-functional IA authority is limited to certain types of accounts with an aggregate unpaid balance of assessment less than or equal to ≡ ≡ ≡ ≡ ≡ ≡ .

1. The types of accounts this authority is limited to are individual accounts, corporate or LLC accounts in which the only open periods are Form 1120 modules, and out-of-business sole proprietor or LLC accounts where the owner of the LLC is identified as the liable taxpayer.

   Note: (1) The limitation on dollar amount does not apply to agreements Appeals can consider under Collection Due Process or the Collection Appeals Program. See IRM 8.22.4, Collection Due Process Appeals Program, IRM 8.24.1, Collection Appeals Program (CAP), and IRM 8.22.7, Alternatives to Collection Action.

   Note: (2) Multi-functional IA authority does not extend to granting agreements in accordance with the procedures provided in IRM 5.14.2.2.1, Partial Payment Installment Agreement Requirements.

2. See streamlined IA procedures for accounts with an aggregate unpaid balance of assessments (SUMRY) less than or equal to $50,000 in IRM 5.14.5.2, Streamlined Installment Agreements.

3. See guaranteed IA procedures for accounts with income tax of $10,000 or less, in IRM 5.14.5.3, Guaranteed Installment Agreements.

   Note: This authority is limited to individual income tax accounts.

4. See In-Business Trust Fund Express for accounts with an unpaid balance of assessment (SUMRY Balance) of $25,000 or less, in IRM 5.14.5.4, In-Business Trust Fund Express IAs.

   Note: This authority is limited to in-business BMF accounts.

(4) Multi-functional authority to grant a Short Term Payment Plan Within 180 days is based on the campus collection function and dollar criterion for requesting payment agreements. These Short Term Payment plans may be granted for up to 180 days (field collection function employees do not have the authority to grant a Short Term Payment Plans Within 180 days). See IRM 5.19.1.6.3, Short Term Payment Plan Within 180 Days, regarding instructions and IRM 5.19.1.2.6, Case Processing Authority Levels, for authority levels for SB/SE campus employees.

(5) The multi-functional IA authority levels apply to assessed and pre-assessed accounts including taxpayers who state an inability to pay when they file their return timely or late.

(6) If the taxpayers do not qualify for guaranteed, streamlined or in-business trust fund express IA processing, a CIS is required. Financial analysis may be done by the function initiating the agreement if sufficient expertise exists. See IRM 5.15.1, Financial Analysis Handbook, regarding financial analysis.

(7) Financial statements—on those cases which do not qualify for guaranteed, streamlined, or Express processing —require verification of income and expenses. Verification may be done by the function initiating the agreement if sufficient expertise exists. Research of local property records regarding real property, personal property, and motor vehicle ownership is not required.

(8) See IRM 5.14.1.4.3 regarding NFTL filing. NFTL filings will be requested from the Collection function on Form 12636, Request for Filing or Refiling Notice of Federal Tax Lien.

(9) If the function initiating the agreement is not able to conduct financial analysis or verification, assistance will be sought from Collection personnel, or the taxpayer will be referred to Collection. The function initiating the agreement may assist the taxpayer in completing the CIS before referring the taxpayer to Collection.

(10) Upon identification of an IA request, the case-file will be noted that an IA is "pending." See IRM 5.14.1.3 regarding criteria necessary for identification of "pending" status.

(11) If a CSED extension is appropriate see IRM 5.14.2.3, Collection Statute Expiration Date (CSED): Law, Policy and Procedures.

(12) IAs will be approved by functions that initiate agreements. Completed forms will be routed as follows:

1. All field functions initiating IAs will route completed forms to Centralized Case Processing (CCP).

2. Appeals may input IAs secured within its function according to local guidelines (except Manually Monitored IAs). See IRM 8.20.7.20.17, CDP/EH with an Installment Agreement, and IRM 8.20.7.41, Installment Agreements (IA), for Appeals procedures.

3. If the function initiating the agreement is not located in an area office or has made arrangements to send completed forms directly to a campus, then completed forms will be routed to CSCO for processing.

4. If a campus secures an original IA and Form 900, Tax Collection Waiver, copies of both forms will be forwarded to CCP.

(13) If an account does not fall within the multi-functional guidelines or a function is unable to grant an IA for any reason, assistance will be sought from the Collection function or the taxpayer will be referred to Collection.

(14) If the proposed IA cannot be granted due to the taxpayer’s noncompliance to deposit or estimated tax payment requirements, failure to file required returns, or failure to provide information (within a reasonable deadline); then the procedures in IRM 5.14.9.7, Independent Administrative Review after Recommended Rejection of Installment Agreement Requests, and IRM 5.14.9.8, Collection Appeals Program, should be followed before the case is referred to field revenue officer groups. See IRM 5.19.1.3.2.4, Revenue Officer (RO) Assignment.

(15) Local procedures should be developed by SB/SE Area Collection functions to accommodate other functions seeking assistance. Collection is responsible for the administration of IAs.

(16) Examination employees who receive an IA request from a taxpayer should follow the procedures in IRM 4.19.13.11, Taxpayer Replies, and IRM 4.20.1.4, Installment Agreements, for Examination Collectibility Procedures.

(1) These procedures apply to area offices, campuses and Automated Collection System (ACS) Call sites. Directors will designate employees responsible for specified inputs at a central location, or at the group, team, or unit level. Responsible functions must be continuously available to receive telephonic requests for input of TC 971, Action codes 043 & 063, during core business hours. Requested transaction codes must be input to IDRS immediately upon the request of contact employees.

(2) The following transaction/action codes identify and reverse identification of pending and active IAs:

(3) Status 60, TC 971, IDRS, Master File (MF) interface information:

• TC 971 AC 043 must be manually requested for input to IDRS for pending agreements

• TC 971 AC 063 is generated by status 60, or may be manually input to IDRS

• Any change from 6X (60, 61, 64) to any Master File status other than Status 26 generates TC 971 AC 163

• Status 64 DOES NOT generate TC 971 AC 163. While accounts are in IDRS status 64, they remain in MF status 60. See "For Defaulted/Terminated Agreements" above)

• When TC 971 AC 163 is input, it reverses the TC 971 AC 063.

• If TC 971 AC 063 is not present, use TC 972 AC 043 to reverse TC 971 AC 043

• TC 972 AC 063 reverses an erroneous input of TC 971 AC 063

(1) Designate 4 digit ALNs (XXYY) to identify IAs by type and originator. The XX Position (first two digits) denotes either Initiator or Agreement Type. The XX values are:

(2) The "YY" position (second two digits) denotes Agreement Conditions. "YY" values are:

(3)

(4) Exception: When any DDIA selection is made regardless of any other "YY" choices, ICS will systemically use 03 in the "XX" position.

(5) The highest priority value will be used for the YY indicator. If multiple conditions exist, and one of the conditions below is used in the YY position, all other selected values will be systemically written in the Additional Conditions section of the Form 433-D and in the ICS history. This information will NOT be included in the additional conditions section of the taxpayer's Letter 2850 or Letter 2849. The cross-reference TIN information will be printed on the letter.

(1) Form 13623, Waiver of Restriction of Levy During a Pending or Active Installment Agreement, is used to identify assets and levy sources that taxpayers request to have levied during a pending or active IA.

(1) The table below is a complete list of IA originator codes:

(1) The table below outlines the different IAs available and the conditions under which the IRS generally approves them.

(2)

• * Verification of ability to pay using SLIAC/CIS is not required unless the taxpayer has defaulted an IA for missed payments in the past 12 months

• ** Verification is not required for IBTF IAs up to $25,000 that will full pay within 60 months, see IRM 5.14.7.4(6)

• **** Outstanding liabilities only include current and prior year liabilities and the IA will full pay all liabilities within 24 months

(3) To identify accounts as a Pending IA, the taxpayer must:

• Provide sufficient information to identify the taxpayer

• Identify the liability to be covered by the IA

• Propose a monthly or other periodic payment of a specified amount

• Be in compliance with all filing requirements

• If the taxpayer is identified as a BMF pyramider, must be in compliance with all FTD requirements

• Not be in bankruptcy (unless eligible for guaranteed IA for post-petition liabilities)

• Provide for the full payment of the liability by the CSED date in the case of a Restitution Based Assessment