IRS Installment Agreement Guide

An installment agreement is exactly what it sounds like. You owe the IRS money, you cannot pay it all at once, so you make monthly payments. IRC §6159 authorizes the IRS to enter into these agreements, and for balances under $10,000, they are required to accept if you meet basic conditions.

Types of Installment Agreements

Guaranteed agreements cover balances of $10,000 or less. No financial statement required. You must be able to full-pay within three years, and you cannot have had an installment agreement in the prior five years. The IRS must accept.

Streamlined agreements cover up to $50,000. Still no financial disclosure. You get up to 72 months to pay. This is where the Fresh Start Initiative made the biggest impact — it used to cap at $25,000.

Non-streamlined agreements cover $50,001 to $100,000. You will need to provide a Form 433-F, which is a simplified financial statement. Up to 84 months to pay.

Regular agreements cover anything above $100,000. Full financial disclosure on Form 433-A or 433-B. The IRS will scrutinize everything.

Partial Pay Installment Agreements

This is the one most people do not know about. Under IRC §6159(a), the IRS can accept monthly payments that will not fully satisfy the debt before the collection statute expires. You pay what you can afford, and whatever is left when the CSED hits goes away. The IRS must review these every two years.

Key Considerations

Penalties continue to accrue during an installment agreement, but the failure-to-pay penalty drops to 0.25% per month under §6651(h). Interest never stops. A default gives you a 30-day cure period before the IRS terminates the agreement and resumes enforced collection. We negotiate these every week.

Tax attorney Darrin Mish has spent 32 years getting taxpayers out of IRS trouble. Free consultation — no obligation.