IRS Collections Archives - Page 5 of 9

Installment Agreement Default: What to do

May 25, 2026December 16, 2013 by Brotman Law

The Internal Revenue Service defines default of an installment agreement as the taxpayer providing inaccurate information or the taxpayer not meeting the terms of their agreement. In this case, the agreement may be terminated. A taxpayer may appeal a proposed termination.

Key Takeaways

The Internal Revenue Service defines default of an installment agreement as the taxpayer providing inaccurate information or the taxpayer not meeting the terms of their agreement. In this case, the agreement may be terminated.
Taxpayers that do not meet the terms of the installment agreement “will be notified in writing and given 30 days to comply with the terms of the agreement before the agreement is terminated” (IRS.gov, “Part 5. Collecting Process, Chapter 14.
The IRS will first make a lien determination before considering the request for reinstatement. Default and reinstatement terminations due to the taxpayer missing and/or skipping payments will require manager approval.

Form 9465 and Form 433-F

May 25, 2026December 16, 2013 by Brotman Law

Form 9465

Taxpayers can use Form 9465, Installment Agreement Request to request consideration for a monthly installment plan if they cannot pay the full amount shown on the tax return. Taxpayers making payments on a current installment agreement cannot use Form 9465.

Key Takeaways

Accounts and lines of credit also include reports of stocks and bond holdings. You must list all real estate you currently own and/or plan on purchasing. You will need the county description.
List all credit cards whether you have a balanced owed or not. In addition, you must list accounts receivables owed to your business as well as information about business credit cards. Section F requires that you include employment information.

More about IRS Installment Agreements

May 25, 2026December 16, 2013 by Brotman Law

Partial Payment IRS Installment Agreement

Taxpayers are encouraged to pay in full and immediately all delinquent tax liabilities. However, “if full payment cannot be achieved by the Collection Statute Expiration Date (CSED), and taxpayers have some ability to pay, the Service can enter into Partial Payment Installment Agreements (PPIAs)” (IRS.gov, “Part 5. Collecting Process, Chapter 14. Installment Agreements, Section 2. Partial Payment Installment Agreements and the Collection Statute Expiration Date (CSED),” 8/21/2013). Before the PPIA can be granted, the equity in the taxpayer’s assets will have to be evaluated to determine if it can be used pay down the tax liability.

Key Takeaways

Partial Payment IRS Installment Agreement
Regular IRS Installment Agreement (over $50,000)
IRS Installment Agreement and Set-up Fees

Streamlined Installment Agreement

May 25, 2026December 16, 2013 by Brotman Law

The streamlined installment agreement helps taxpayers catch up on their back taxes. The streamlined installment agreement is part of the Fresh Start initiative. The initiative offers benefits to the taxpayer. The benefits are specific to the maximum dollar criteria and the maximum term for the agreement. For example, “the maximum dollar criteria for streamlined installment agreements has been raised from $25,000 to $50,000 and the maximum term has been raised from 60 months to 72 months” (IRS.gov, “Fresh Start Installment Agreements,” 8/20/2013).

Key Takeaways

To qualify under the second category, the balance due must be within a range of $25,001 and $50,000. Similar to the first category, if you owe more than $50,000, then you will need to pay down the balance before initiating the agreement.
Under each category, taxpayers must file Form 1040 and may be subject to the Trust Fund Recovery penalty. Defunct businesses under each category must also submit one or more of the following forms: 940, 941, or 943.

Automatic IRS Installment Agreement

May 25, 2026December 16, 2013 by Brotman Law

An automatic IRS installment agreement is an agreement by which taxpayers can make monthly payments utilizing one of three online payment options as well as self-certifying through an online payment agreement application, which allows taxpayers to work out their payments online rather than face-to-face with a representative. The IRS offers an online payment agreement tool that requires information specific to the taxpayer such as balance due notice from the IRS, Social Security or Taxpayer Identification Number, and a personal identification number generated online.

Key Takeaways

automatic IRS installment agreement
online payment agreement
Payroll Deduction Agreement
Form 2159, Payroll Deduction Agreement

What is an IRS Installment Agreement?

May 25, 2026December 16, 2013 by Brotman Law

Taxpayers that are responsible for an outstanding tax liability with the government are responsible for ensuring they meet the obligation. Overdue tax balances are subject to interest and monthly late payment penalties. The IRS advises taxpayers to pay their balances in full to minimize additional charges. “Penalties are also assessed for failure to file a tax return so you should file immediately even if you cannot pay your balance in full” (IRS.gov, “Topic 202 – Tax Payment Options,” 8/19/2013).

Key Takeaways

Taxpayers that are responsible for an outstanding tax liability with the government are responsible for ensuring they meet the obligation. Overdue tax balances are subject to interest and monthly late payment penalties.
The IRS offers various options for taxpayers making payments.
The IRS charges an installment agreement user fee of $105 when you enter into a standard installment agreement or a payroll deduction installment agreement (“Topic 202”).

Releasing a Levy While in Currently Not Collectible Status

May 25, 2026December 16, 2013 by Brotman Law

A levy can be released while a taxpayer is in currently not collectible status. Section 6343(a)(1) of the Internal Revenue Code requires a levy to be released if the Service determines that the circumstances are appropriate based upon policy. The Internal Revenue Service will require “supporting documentation as is reasonably necessary to determine whether a condition requiring release exists” (IRS.gov, “Part 5. Collecting Process, Chapter 11. Notice of Levy, Section 2. Serving Levies, Releasing Levies and Returning Property, 8/18/2013). The IRS allows the release of a notice of levy when it is clear that circumstances will prevent the taxpayer from making payments and the IRS from receiving payments.

Key Takeaways

A levy can be released while a taxpayer is in currently not collectible status. Section 6343(a)(1) of the Internal Revenue Code requires a levy to be released if the Service determines that the circumstances are appropriate based upon policy.
An example of this might deal with an employer receiving a notice of release of levy.
There are additional legal bases for release of levy. “Section 362(a) of the Bankruptcy Code (Title 11) prohibits levy on the property of a taxpayer in bankruptcy” (“Section 2. Serving Levies, Releasing levies and Returning Property”).

IRS Currently Not Collectible Status – Part Three

May 25, 2026December 16, 2013 by Brotman Law

How Do I Obtain Currently Not Collectible Status?

To obtain currently not collectible status, you will need to consider addressing your concerns with a tax attorney who is an expert in resolving IRS back-tax liability and who is competent enough to review your financial situation “for free to determine whether pursuing Currently Not Collectible status is worthwhile; if hired, he or she will also take care of the rest of this process” (Hein).

Key Takeaways

To obtain currently not collectible status, you may also contact the IRS directly and apply using Form 433-F, Collection Information Statement.
To request currently not collectible status, you must demonstrate an inability to pay the tax debt. You must show specifically that you cannot make monthly payments.
If you are married, the IRS requires you to submit the information above for both parties.

IRS Currently Not Collectible Status – Part Two

May 25, 2026December 16, 2013 by Brotman Law

Pros and Cons of IRS Currently Not Collectible Status

The pros and cons of receiving a currently not collectible status are specific to the taxpayer’s ability to pay taxes owed. If the taxpayer is unable to pay, then he or she will receive this consideration. If the taxpayer cannot pay the tax owed, and the IRS fails to collect the debt in ten years, then the taxpayer will not have to pay the debt. However, there is a ten-year statute of limitations that the IRS can exercise in the event that the taxpayer is able to begin a payment structure.

Key Takeaways

The pros and cons of receiving a currently not collectible status are specific to the taxpayer’s ability to pay taxes owed. If the taxpayer is unable to pay, then he or she will receive this consideration.
It is important to note that currently not collectible status should not be considered as a permanent form of tax debt resolution.
The IRS will periodically monitor your financial situation. The IRS will review reports from third parties such as employers and banks.

IRS Currently Not Collectible

May 25, 2026December 16, 2013 by Brotman Law

IRS Currently Not Collectible (CNC)[1] is defined as the decision the IRS takes in concluding that a taxpayer has no ability to pay their annual federal income taxes. This type of status protects taxpayers from the “aggressive tactics of the IRS Collection Division” (Avvo.com, “Currently Not Collectible Status,” 8/18/2013). The IRS currently not collectible status is useful for taxpayers wishing to negotiate regarding their responsibility to pay off owed taxes. “Negotiating Currently Not Collectible status indicates to the IRS that you are serious about your responsibility to pay off taxes you may owe but do not have the funds to pay at this time” (Hein).

Key Takeaways

The IRS can declare a taxpayer in“IRS currently not collectible” after receiving evidence of the taxpayer’s inability to pay. This type of evidence is typically obtained from the taxpayer on IRS Form 433-F, Collection Information Statement.
Once a taxpayer is declared IRS currently not collectible, the IRS stops all collection activities, which include issuing levy and garnishment orders. The IRS sends an annual statement to the taxpayer outlining the outstanding tax.
While the taxpayer is in not collectible status, the ten-year statute of limitations still applies within this context. However, if after 10 years the IRS still cannot the collect the tax, then the tax debt will expire.