GUARANTEED, STREAMLINED & IN-BUSINESS TRUST FUND EXPRESS AGREEMENTS
Part 5. Collecting Process
Chapter 14. Installment Agreements
Section 5. Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements
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5.14.5 Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements
5.14.5.1 Overview
5.14.5.2 Streamlined Installment Agreements
5.14.5.3 Guaranteed Installment Agreements
5.14.5.4 In-Business Trust Fund Express Installment Agreements
5.14.5.1 (09-26-2008)
Overview
Streamlined and In-Business Trust Fund Express agreements benefit taxpayers because they may be processed quickly, without financial analysis or managerial approval. Guaranteed agreements provide qualified taxpayers who have a one-time account delinquency the statutory right to an agreement if their taxes are $10,000 or less and certain other conditions are met. Extensions of time to pay may be granted to taxpayers who are able to pay by a certain date by W&I and SB/SE Campus Compliance and ACS employees (See IRM 5.19.1.5.3). Collection Field function employees are not authorized to grant extensions of time to pay.
5.14.5.2 (09-26-2008)
Streamlined Installment Agreements
Streamlined installment agreements may be approved for taxpayers under the following circumstances:
The aggregate unpaid balance of assessments (the SUMRY balance) is $25,000 or less. The unpaid balance of assessments includes tax, assessed penalty and interest, and all other assessments on the tax modules. It does not include accrued penalty and interest.
If pre-assessed taxes are included, the pre-assessed liability plus unpaid balance of assessments must be $25,000 or less.
The aggregate unpaid balance of assessments will be fully paid in 60 months, or the agreement will be fully paid prior to the CSED, whichever comes first. (Use IDRS CC ICOMP)
Accounts in any status qualify, including:
Notice status accounts;
Balance due status accounts; and
Pre-assessed accounts.
The following types of taxpayers qualify for streamlined agreements:
IMF;
BMF (income tax only); and
Out of business BMF (any type tax).
A lien determination is not required but may be made at the discretion of the revenue officer and liens may be filed.
No managerial approval is required.
These agreements may be secured in person, by telephone or by correspondence.
As with all agreements, the taxpayer must have filed all tax returns that are due prior to entering into the agreement. (See IRM 5.14.1.3 and IRM 5.14.1.4.1).
See IRM 5.14.11.7, regarding reinstatement of agreements that meet streamlined criteria.
Encourage taxpayers to pay assessed amounts greater than $25,000 to:
avoid the need for securing financial statements; and,
qualify for streamlined agreements.
(See IRM 5.14.1.4(8)(Example))
Taxpayers may be granted streamlined agreements based on the criteria provided in IRM 5.14.5.2(1) – (9), even if they are able to fully pay their accounts.
Penalties and interest continue to accrue throughout the duration of an installment agreement. If taxpayers are notified of this they may decide it is in their best interest to fully pay balance due accounts.
5.14.5.3 (09-26-2008)
Guaranteed Installment Agreements
Internal Revenue Code (IRC) section 6159(c) requires the Service to accept proposals of installment agreements under certain circumstances. In accordance with IRC 6159(c) the Service must accept proposals to pay in installments if taxpayers:
owe income tax only of $10,000 or less (excluding penalties and interest);
have not failed to file any income tax returns or to pay any tax shown on such returns during any of the preceding five taxable years;
cannot pay the tax immediately (see (2) below);
agree to fully pay the tax liability within 3 years;
agrees to file and pay all tax returns during the agreement; and
have not entered into an installment agreement during any of the preceding five taxable years.
Note:
The minimum monthly payment amount in LEM 5.14.5.3(1)does not apply to guaranteed installment agreements. (See IRM 5.14.4.2.)
As a matter of policy, the Service grants guaranteed agreements even if taxpayers are able to fully pay their accounts. (See also IRM 5.14.1.4(8), and IRM 5.14.5.2(10).)
Unlike the criteria for streamlined agreements, the dollar limit for guaranteed agreements of $10,000 only applies to tax. The taxpayer may owe additional amounts in penalty and interest (both assessed and accrued) and qualify for a guaranteed agreement, so long as the tax liability alone is not greater than $10,000.
Guaranteed installment agreements may be granted by revenue officers and other contact employees. Managerial approval is not required for these agreements.
Note:
Agreements that require CSED extensions may not be processed as "guaranteed" installment agreements. (See IRM 5.14.2.2 (2)).
IDRS CC ICOMP will be used to determine if the tax, including statutory additions, can be fully paid within three years.
If taxpayers do not qualify for guaranteed agreements, consider streamlined agreements prior to considering other alternatives. Process guaranteed agreements as streamlined agreements.
Penalty and interest continue to accrue during these – and all other – installment agreements, though they are guaranteed by law. If taxpayers are notified of this they may decide it is in their best interest to fully pay balance due accounts.
5.14.5.4 (09-26-2008)
In-Business
Trust Fund Express
Installment Agreements
In-Business Trust Fund (IBTF) Express installment agreements may be granted if:
In order to qualify, the entire liability including accruals must total the amount in LEM 5.14.5.4(1) when the case is received in inventory. The taxpayer may not reduce a liability that exceeds the amount in LEM 5.14.5.4(1) in order to qualify.
Taxes are fully paid in 24 months, or before the CSED, whichever is earlier. (Use IDRS CC ICOMP to calculate agreement lengths; see IRM 5.14.2.2 regarding CSED extensions.)
If accounts qualify for IBTF Expressagreements:
Collection Field function employees must make a field call to view assets and request full payment prior to granting an IBTF Express agreement.
No financial statement is required.
Input bank and receivables information to ICS.
A lien determination is required by Collection Field function employees, see IRM 5.12.2.4 (no lien determination is required by ACS or Campuses, but liens may be filed if they will protect the government’s interest, such as if a property sale is imminent).
No Trust Fund Recovery Penalty determination is required; however, the revenue officer must ensure that the Assessment Statute Expiration Date (ASED) is protected.
Check IDRS for (and verify with taxpayers) filing and payment compliance. If not in filing compliance, installment agreements may not be granted.
If for any reason rejection of installment agreements is planned, refer for Independent Administrative Review. (See IRM 5.14.9.3).
Use agreement locator number (ALN) 0215.
Note:
ALNs are input systemically on agreements granted using ICS.
Managerial approval is required.
Forward approved IBTF Express IAs electronically to CCP by choosing Option E on the print menu; or on a Form 3210 to CCP. No further field action is required. No monitoring is necessary in CCP. If the IA is electronically processed, the RO must send the closed file to CCP closed files.
If IBTF Express agreements are in default, or are terminated, they may be reinstated or new agreements may be granted immediately if:
The taxpayer re-qualifies for an agreement under the above guidelines, or other guidelines provided in this manual. (Also see IRM 5.14.11).
The Collection Statute Expiration Date (CSED) is considered (See IRM 5.14.5.4(1)(b)).
Business accounts over the amount in LEM 5.14.5.4(6) do not qualify for IBTF Express agreements.
Use Streamlined procedures (IRM 5.14.5.2) for income taxes on in business accounts and out of business accounts $25,000 or less.
See IRM 5.14.7 for IBTF accounts that do not meet the above criteria
Thomas F. DiLullo, P.C.
A Hackensack law firm serving Bergen County, as well as, New Jersey, New York and Connecticut, and Federal tax cases nationwide.