5.14.5  Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements

Manual Transmittal

May 23, 2014

Purpose

(1) This transmits a revision for IRM Part 5.14.5, Installment Agreements, Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements to include the Interim Guidance memorandums identified below.

Material Changes

(1) IRM 5.14.5.4 revised to incorporate instructions provided in the Interim Guidance memorandum SBSE-05-0314-0026, "In-Business Trust Fund Express Installment Agreements" issued on March 27, 2014.

(2) IRM 5.14.5 revised throughout to incorporate changes in policy and procedures announced in the Interim Guidance memorandum SBSE 05-0214-017, "Streamlined Installment Agreements" issued on February 21, 2014.

(3) IRM 5.14.5.3 removed reference to minimum IA payment.

(4) IRM 5.14.5.4(4) eliminated the requirement for a TFRP determination if the periods owed are only current and prior calendar years, and the liability will be fully paid in 24 months.

Effect on Other Documents

This material supersedes IRM 5.14.5, dated March 11, 2011. Includes Interim Guidance Memorandum SBSE-05-0311-038, In-Business Trust Fund Express Installment Agreements, reissued as Interim Guidance Memorandums SBSE 05-0312-034, 05-0313-024, 05-0713-067, 05-1213-0113 and 05-0314-0026 and Interim Guidance Memorandum SBSE 05-0112-013, Streamlined Installment Agreements and reissued as Interim Guidance Memorandums SBSE 05-0113-007, SBSE-05-0313-021 and SBSE-05-0214-017.

Audience

SB/SE Collection Employees

Effective Date

(05-23-2014)

Rocco A. Steco
Acting Director, Collection Policy

5.14.5.1  (05-23-2014)
Overview

  1. This IRM provides procedures for establishing installment agreements utilizing Guaranteed, Streamlined, or In-Business Express criteria. Guaranteed agreements provide qualified taxpayers who have 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. Streamlined Criteria has two tiers, up to $25,000, and $25,001 - $50,000 and can be used on income tax liabilities, and out of business modules. In-Business Trust Fund Express installment agreements can be secured without securing financial information on BMF accounts up to $25,000. These agreements reduce taxpayer burden because they may be processed quickly and without securing a collection information statement. The Service benefits from these agreements through more efficient case processing.

5.14.5.2  (05-23-2014)
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 $50,000 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 $50,000 or less.

    3. The minimum payment amount is determined by dividing the SUMRY balance by 72. The IA must resolve all balances due prior to the expiration of the CSED . (Use IDRS CC ICOMP or Decision IA.)

  2. Accounts in any status qualify, including:

    • Notice status accounts;

    • Balance due status accounts; and

    • Pre-assessed accounts.

  3. The following types of taxpayers qualify for streamlined agreements with an aggregate unpaid balance of assessment (SUMRY balance) of $25,000 or less:

    • IMF;

    • BMF (income tax only - forms 1120, 1065-late filing penalty); and

    • Out of business BMF (any type tax).

      Note:

      See IRM 5.14.4.3(2) and (3) when your request involves including related IMF/BMF accounts into one IA.

  4. The following types of taxpayers qualify for streamlined agreements with an aggregate SUMRY balance of $25,001 — $50,000:

    • IMF

    • Out of Business Sole Proprietors

  5. A lien determination is not required for a streamlined installment agreement but may be made at the discretion of the revenue officer and liens may be filed.

    Reminder:

    Where an NFTL filing determination is not required, but a decision to file an NFTL has been made, document the justification in the case history including the manager’s concurrence.

  6. No managerial approval is required.

  7. Streamlined installment agreements with a SUMRY balance between $25,001 and $50,000 must be established as a Direct Debit IA or a Payroll Deduction IA. Additionally, if the taxpayer has defaulted an installment agreement for missed payments in the past 12 months, the taxpayer's ability to pay must be verified using the streamlined IA calculator (SLIAC) or a Collection Information Statement (CIS) if it has already been provided by the taxpayer.

  8. These agreements may be secured in person, by telephone or by correspondence.

    Note:

    DDIAs and PDIAs require a Form 433D/2159 signed by the taxpayer

  9. 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 5.14.1.4.1).

  10. See IRM 5.14.11.5(2)(a), regarding reinstatement of agreements that meet streamlined criteria.

  11. Encourage taxpayers to pay assessed amounts greater than $50,000 to:

    • avoid the need for securing financial statements; and,

    • qualify for streamlined agreements.

    [See IRM 5.14.1.4(7) (Example)]

  12. Taxpayers may be granted streamlined agreements based on the criteria provided in IRM 5.14.5.2(1) – (11), even if they are able to fully pay their accounts.

  13. All streamlined installment agreements will use 36 in the YY position of the Agreement Locator Number.

  14. Taxpayers should be advised of accruals of penalty and interest during the duration of an installment agreement. If the taxpayers decide it is in their best interest to fully pay the account balance, a payoff balance should be provided to the taxpayers with instructions regarding payment submission.

5.14.5.3  (05-23-2014)
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 are individuals who:

    1. owe income tax only of $10,000 or less (excluding penalties and interest);

    2. have not failed to file any income tax returns or to pay any tax shown on such returns during any of the preceding five taxable years;

    3. cannot pay the tax immediately (see (2) below);

    4. agree to fully pay the tax liability within 3 years;

    5. agree to file and pay all tax returns during the term of the agreement; and

    6. have not entered into an installment agreement during any of the preceding five taxable years.

  2. As a matter of policy, the Service grants guaranteed agreements even if taxpayers are able to fully pay their accounts. (See also IRM 5.14.1.4(8), and IRM 5.14.5.2(10).)

  3. Unlike the criteria for streamlined agreements, the dollar limit for guaranteed agreements of $10,000 only applies to tax. 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 liability alone is not greater than $10,000.

  4. Guaranteed installment agreements may be granted by revenue officers and other contact employees. Managerial approval is not required for these agreements.

  5. A lien determination is not required for a guaranteed installment agreement but may be made at the discretion of the revenue officer and liens may be filed.

    Reminder:

    Where an NFTL filing determination is not required, but a decision to file an NFTL has been made, document the justification in the case history including the manager’s concurrence.

  6. IDRS CC ICOMP or Decision IA will be used to determine if the tax, including statutory additions, can be fully paid within three years.

  7. If taxpayers do not qualify for guaranteed agreements, consider streamlined agreements prior to considering other alternatives. Process guaranteed agreements as streamlined agreements on ICS.

  8. Taxpayers should be advised of accruals of penalty and interest during the duration of an installment agreement. If the taxpayers decide it is in their best interest to fully pay the account balance, a payoff balance should be provided to the taxpayers with instructions regarding payment submission.

5.14.5.4  (05-23-2014)
In-Business
Trust Fund Express
Installment Agreements

  1. In-Business Trust Fund (IBTF) Express installment agreements may be granted if:

    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. IBTF Express agreements may not be granted where the first payment on the agreement is a lump sum payment to be made in order to pay down the balance to meet the $25,000 criteria. Taxpayers must meet the dollar criteria at the time the IBTF Express IA is granted. However, taxpayers with a liability greater than $25,000, can be considered for an IBTF Express agreement if they pay down the liability to $25,000 or less prior to the agreement being granted

    3. Taxes are fully paid in 24 months, or before the CSED, whichever is earlier. (Use IDRS CC ICOMP or Decision IA to calculate agreement lengths.

  2. If accounts qualify for IBTF Express agreements:

    1. Collection Field function employees are not required to make a field call just to view assets prior to granting an IBTF Express agreement.

    2. No financial statement is required.

    3. Input bank and receivables information to ICS.

    4. Check IDRS for (and verify with taxpayers) filing and payment compliance. If not in filing compliance, installment agreements may not be granted.

    5. If for any reason rejection of installment agreements is planned, refer for Independent Administrative Review. (See IRM 5.14.9.7).

  3. Per IRM 5.12.2.3.1 a lien notice filing determination decision is not required for in-business Trust Fund Express Agreements. If the case cannot be closed as an IBTF Express IA on or before the IRM 5.12.2.3.2 lien notice filing determination requirement date, a lien notice filing determination decision must be made based on the facts of the case. The revenue officer has the latitude to make a non-filing deferral determination decision then finish the negotiation and grant the IBTF Express IA. Liens may be filed if they will protect the government's interests, such as:

    • the BMF entity has defaulted on an IA in the current year or prior calendar year periods;

    Note:

    Where an NFTL filing determination is not required, but a decision to file an NFTL has been made, document the justification in the case history including the manager’s concurrence.

  4. A TFRP determination is not required if:

    • UBA is $25,000 or less; and,

    • Outstanding liabilities only include current year or prior calendar year periods; and,

    • The entire liability will be paid in 24 months

      Note:

      A determination to pursue the TFRP should not be made when the taxpayer meets the criteria for an IBTF Express IA and the decision has been made to grant the agreement (see IRM 5.7.4.1(3)). If the TFRP was recommended or assessed prior to the decision to grant an IBTFE IA, you must document whether you are pursuing collection of the TFRP or placing it in deferral status during the IA.

      .

  5. Use of the Direct Debit payment option (DDIA) is required on all lBTF Express lAs with a UBA between $10,000 and $25,000

  6. If you have a case that is an IBTF-Express IA that is paid using the direct debit payment option, see IRM 5.14.10.5 for input, approval, and routing procedures for this type of IA.

  7. Managerial approval is required.

  8. 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).)

  9. Business accounts with a UBA over $25,000 do not qualify for IBTF Express agreements.

    1. Use Streamlined procedures (IRM 5.14.5.2) for income taxes (Form 1120, Corporate Income Tax, and Form 1065, Late Filing Penalty on Partnership Returns) on in business accounts and out of business accounts of $25,000 or less.

    2. See IRM 5.14.7 for IBTF accounts that do not meet the above criteria.

5.14.5.5  (03-11-2011)
Disposition of Approved Installment Agreement Documents

  1. The preferred method of closing Guaranteed, Streamlined, and In-Business Express IAs is by choosing Option A on the ICS Installment Agreement menu. Choosing this method of closure allows these installment agreements to be systemically uploaded from ICS to IDRS.

  2. After the group manager approves the IA (if applicable), an ICS Print Manager Dialogue box provides the option of E-mail or immediate printing of the Form 433-D and Letter 2850. An ICS history entry is generated stating the IA was systemically uploaded to IDRS.

  3. Generation of the acceptance letters and Form 3210s has not changed with the systemic upload process. You are still responsible for mailing of the Letter 2850 to the taxpayer and power of attorney, if applicable.

  4. Write "FILE COPY" in RED ink along the top of the Form 433-D and place it in the closed case file. Send the closed case file to CCP on a manually created Form 3210 or Form 795-B to:

    Internal Revenue Service

    2970 Market Street

    Mail Stop 5-E04.115

    Philadelphia, PA., 19104

  5. If a hard copy of Form 433-D was prepared and approved outside of ICS, select "Option B" under the Installment Agreement menu to close the case on ICS. Selection of this option will generate a TC 971 AC 063. Use the systemically generated Form 3210 to route the agreement (Form 433D) to CCP at:

    Internal Revenue Service

    2970 Market Street

    Mail Stop 5-E04.114

    Philadelphia, PA., 19104

  6. Use either the Form 795-B or a Form 3210 to send the case file to closed files to CCP at Mail Stop 5-E04.115.

  7. Option B does not systemically generate an approval notification, Form 433-D or the Letter 2850. Create the Letter 2850 from the Installment Agreement menu under the Templates Listing on ICS. It is your responsibility to mail the letter to the taxpayer and power of attorney, if applicable.


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