Streamlined and Expanded Installment Agreements

The IRS made changes to its criteria for streamlined installment agreement processing permanent on September 26, 2018.  The enhanced criteria for both streamlined and expanded installment agreements improves customer service, reduces taxpayer burden and increases agency efficiency. With the enhanced criteria, more taxpayers now qualify to have their installment agreement request processed.

Note: Approximately 80-90 percent of individual taxpayers with a balance due qualify to use the IRS’s Online Payment Agreement application. While the criteria for using this application have not changed, the IRS encourages qualified taxpayers to use the online application and increase their convenience by choosing the direct debit method of payment.  Also, the fees for using the online application and choosing the direct debit method of payment are lower than if you apply on paper or make your payments using other options. 

Fact Sheet

Most taxpayers with a balance due of up to $25,000 meet the criteria for streamlined processing of their installment agreement request. In general, IRS assistors can set up an installment agreement without the completion of a Collection Information Statement or a determination to file a Notice of Federal Tax Lien.

The new streamlined and expanded installment agreement criteria apply to requests submitted through:

  • SB/SE Campus Collection Operations, including:
    • Automated Collection System (ACS)
    • Automated Collection System Support (ACSS)
    • Compliance Services Collection Operations (CSCO)
  • Taxpayer Assistance Centers

The criteria do not apply to accounts worked by Field Collection revenue officers.

The new streamlined processing criteria apply to the following types of taxpayers:

  • Individuals and out-of-business sole proprietors with an assessed balance of tax, penalties and interest up to $50,000
  • Out-of-business taxpayers with assessed balances up to $25,000
  • In-business taxpayers with income tax only assessed balances up to $25,000

Note: All taxpayers must be current with filing all required returns to qualify.

The new streamlined installment agreement processing criteria are as follows:

STREAMLINED CRITERIA

Payment Terms

Up to 72 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less.

Collection Information Statement

Not required.

Payment Method

The preferred method is either direct debit or payroll deduction, but not required.

Advantages of direct debit agreements include:

  • Reduced user fee
  • Waived user fee for low-income taxpayers entering into direct debit agreements on or after April 10, 2018
  • Eliminated check mailing
  • Eliminated postage

Notice of Federal Tax Lien

Determination not required for assessed balances up to $25,000.

Determination not required for assessed balances of $25,001 - $50,000 with the use of direct debit or payroll deduction agreement.

For a streamlined installment agreement over $25,000 and there is no direct debit or payroll deduction agreement, then a Notice of Federal Tax Lien determination is required.

The new expanded installment agreement criteria apply only to individual taxpayers and out-of-business sole proprietors with an assessed balance of tax, penalties and interest between $50,001 and $100,000 who are current with filing all required returns. The new expanded processing criteria are as follows:

EXPANDED CRITERIA

Payment Terms

Up to 84 months – or – the number of months necessary to satisfy the liability in full by the Collection Statute Expiration date, whichever is less

Collection Information Statement

Not required if the taxpayer agrees to pay through direct debit or payroll deduction

Payment Method

IRS prefers a direct debit or payroll deduction; however, without one of these methods, IRS requires a Collection Information Statement.

Notice of Federal Tax Lien

IRS requires a determination.

For operating businesses with a trust fund tax liability, criteria for processing of In-Business Trust Fund Express installment agreement requests have not changed. See Internal Revenue Manual, section 5.14.5.