CTRS Installment Agreements and Payment Plans Flashcards

What is the IRS's 'Fresh Start' initiative and how did it affect installment agreement thresholds?

Answer: Fresh Start expanded the Streamlined IA threshold from $25,000 to $50,000 and extended the payment term from 60 to 72 months

The IRS Fresh Start initiative, launched in 2011 and expanded in 2012, raised the Streamlined IA threshold to $50,000 and extended the maximum payment term to 72 months, making installment agreements more accessible.

Under what circumstances can the IRS default or terminate an existing installment agreement?

Answer: If the taxpayer fails to make a required payment, fails to file a required return, or incurs a new tax liability

The IRS may default an IA if the taxpayer misses a payment, fails to file a required tax return, incurs a new tax liability, or provides inaccurate financial information.

What is a 'Currently Not Collectible' (CNC) status and how does it compare to an installment agreement?

Answer: CNC is a temporary hardship status that suspends collection activity without requiring payments, unlike an IA which requires monthly payments

CNC status (hardship status) temporarily halts IRS collection activity when a taxpayer has no ability to pay, while an installment agreement requires regular monthly payments toward the balance.

What is the In-Business Trust Fund Express Installment Agreement (IBTF-Express IA)?

Answer: An installment agreement for businesses with payroll tax liabilities up to $25,000 that can be paid within 24 months without a financial statement

The IBTF-Express IA is available to businesses (except sole proprietors) with payroll tax liabilities of $25,000 or less that can be paid within 24 months, without requiring financial disclosure.

Can a taxpayer request an installment agreement while a Collection Due Process hearing is pending?

Answer: Yes, and proposing an installment agreement is one of the collection alternatives that can be raised at a CDP hearing

A taxpayer can propose an installment agreement as a collection alternative during a CDP hearing, and the IRS Appeals officer must consider it as part of the resolution process.

What financial disclosure form must accompany a request for a non-streamlined installment agreement for an individual taxpayer owing more than $50,000?

Answer: Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals)

Individual taxpayers requesting installment agreements on balances exceeding $50,000 must submit Form 433-A to document their financial situation for IRS review.