CTRS Installment Agreements and Payment Plans Flashcards

What is a Streamlined Installment Agreement and what are the eligibility criteria for individuals?

Answer: An installment agreement for individuals who owe $50,000 or less and can pay within 72 months, requiring no financial statement

The Streamlined Installment Agreement allows individuals owing $50,000 or less (in combined tax, penalties, and interest) to set up a payment plan for up to 72 months without submitting a financial statement.

What is a Guaranteed Installment Agreement and who qualifies?

Answer: Individuals who owe $10,000 or less in income taxes and can pay within 3 years are guaranteed an installment agreement by statute

Under IRC §6159(c), individuals who owe $10,000 or less in income taxes, can pay within 3 years, and meet other basic criteria are legally entitled to an installment agreement.

What is a Partial Pay Installment Agreement (PPIA) and how does it differ from a standard installment agreement?

Answer: A PPIA allows monthly payments below full liability, with the remaining balance potentially expiring uncollected when the CSED runs out

A PPIA is based on the taxpayer's actual ability to pay, resulting in monthly payments that will not fully satisfy the liability; any balance remaining when the CSED expires becomes uncollectible.

What IRS form is used to request an installment agreement?

Answer: Form 9465

Form 9465 (Installment Agreement Request) is the standard form taxpayers use to formally request an installment agreement with the IRS.

Does entering into an installment agreement stop the accrual of penalties and interest on the outstanding tax balance?

Answer: No, penalties and interest continue to accrue until the balance is paid in full

An installment agreement does not stop interest or penalty accrual; both continue to accumulate on the unpaid balance throughout the life of the agreement.

What is the user fee for establishing a direct debit installment agreement (DDIA) online?

Answer: $31

As of current IRS guidance, the user fee for setting up a direct debit installment agreement online is $31, which is substantially lower than the fee for non-direct debit agreements.