CTRS CTRS Installment Agreements and Payment Plans 2

Question 1

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

Accepted Answer

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

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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.

Question 3

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

Accepted Answer

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

Answer

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.

Question 4

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

Accepted 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

Answer

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.

Question 5

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

Accepted Answer

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

Answer

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.

(CTRS) Certified Tax Resolution Specialist Practice Test

(CTRS) Certified Tax Resolution Specialist Practice Test

CTRS CTRS Installment Agreements and Payment Plans 2