What Is A Streamlined Installment Agreement?

Streamlined Installment Agreement

A monthly payment plan is generally the easiest way to pay off any large debt, even a tax liability, and, yes, you can indeed make payment arrangements with the Internal Revenue Service. There are four types of payment plans offered by the IRS. Here’s our guide for those you asking what is a streamlined installment agreement?

Guaranteed Installment Agreement

The IRS will automatically agree to an installment plan if you owe $10,000 or less. The minimum monthly payment the IRS will accept is the total of your balance due, including penalties and interest, divided by 36 months. But if you want to pay more than this to get rid of the debt in less than 36 months, you certainly can.

Streamlined Installment Agreement

If you don’t meet the criteria for a guaranteed installment agreement, you might qualify for a streamlined installment agreement instead. As of this year taxpayers can qualify for this type of agreement when the balance owed to the IRS is between $50,000 to $100,000. The taxpayer must agree to pay off the balance in 84 months (i.e. 7 years) or less.

The streamlined installment agreement is part of the IRS “Fresh Start Program” that was designed to help taxpayers who owe money. The IRS Fresh Start Initiative was created to expand the benefits and assistance originally offered by the IRS Restructuring and Reform Act of 1998, making it even easier for taxpayers to deal with excessive back taxes and get out of IRS debt. Before Fresh Start, the IRS would approve streamlined agreements only if the balance owed was $25,000 or less and the taxpayer agreed to pay it in full within 60 months.

As with all other installment agreements, the IRS requires that you file all your tax returns first if any are late, and you must agree to file your tax returns on time and pay your taxes on time in the future.

Like the guaranteed installment agreement, the main benefit of a streamlined installment agreement is that the IRS will not file a federal tax lien in an attempt to collect from you. Nor will the IRS ask you to complete financial statement Form 433-F so it can analyze your current financial situation.

The Downsides Of A Streamlined Installment Agreement

Seven years is a long time to repay a debt. If it will take you seven years to repay the IRS, maybe you want to investigate submitting an Offer in CompromiseAlso, in a Streamlined Installment Agreements, a Federal Notice of Tax Lien will usually be filed. This, unfortunately, can do major harm to your credit.

Non-Streamlined Installment Agreement

You’ll have to negotiate your own installment agreement with the IRS if the balance you owe is over $50,000, and you might need the help of a tax debt attorney for this. A non-streamlined agreement is also appropriate if you need a repayment term longer than five years or if you don’t meet any of the other criteria for a streamlined or guaranteed installment plan.

If you are having tax troubles contact Ayar Law today at (248) 262-3400 for a free, no-obligation consultation.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.