5.14.7
BMF Installment Agreements
5.14.7.1
(09-26-2008)
Overview
-
This chapter provides
procedures for processing installment agreements for Business
Masterfile (BMF) accounts including in-business trust fund (IBTF)
balance dues. The Business Masterfile is primarily dedicated to
those accounts with Employer Identification Numbers (EINs), Many
of these accounts involve in-business payroll tax accounts,
and/or large dollar accounts. The procedures in this section
apply to balance due, unassessed liabilities on secured returns,
and to liabilities in notice status. These procedures are
applicable only if taxpayers can pay
operating expenses as well as current and delinquent taxes.
(See IRM 5.14.7.2(1)).
5.14.7.2
(08-05-2010)
Summary of Agreement Criteria for Business Accounts
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When an inability to pay delinquent and accrued
taxes is indicated, the following considerations are necessary:
-
if the taxpayer cannot pay operating
expenses and current taxes, then deferring action on
delinquent and accrued taxes may serve no useful purpose.
Appropriate collection action such as levy, seizure, or a
trust fund recovery penalty, should be considered to
protect the government's interest. The taxpayer’s
interests must also be considered and the financial
statement should be reviewed thoroughly with the taxpayer
to determine if there is a way to reduce expenses in order
to make payment on the taxes and avoid enforced collection
action. (IRM 5.14.7.4 and IRM 5.15 provide procedures for
financial statement analysis).
-
if it is determined the taxpayer can pay
current taxes as well as operating expenses, and pay
delinquent taxes, then follow the installment agreement
procedures in IRM 5.14.7.4.
-
Taxpayers identified as repeaters may not
immediately be granted installment agreements. Installment
agreement requests received from these taxpayers should be
identified as pending if the taxpayer is maintaining
current compliance with federal tax deposit (FTD)
requirements.
Note:
For assessments in the name and Employer
Identification Number (EIN) of a Limited Liability
Company (LLC), determine whether the identity of the
liable taxpayer has changed to determine whether the LLC
would be considered a repeater.
-
If, however, after contact, taxpayers
classified as repeaters do not continue to accrue
liabilities and begin making FTDs and file all appropriate
returns (so that they are in compliance with all filing
requirements); then, they may qualify for installment
agreements.
Note:
Use Form 9297 as required in IRM
5.14.3.1 to request payment, federal tax deposits, and
tax returns.
-
If, based on the above, taxpayers are in current
compliance, then see IRM 5.14.7.2 and IRM 5.14.7.4 (and their
sub-sections) to determine if installment agreements may
otherwise be approved.
Reminder:
If additional information is needed (prior to
approving an installment agreement), provide the taxpayer with
deadlines for submitting the information, along with requests
for payment (as provided in IRM 5.14.3.1.)
-
Installment agreement payments should be applied
in accordance with IRM 5.14.7.5.
-
Enforcement action will not be taken while the
installment agreement is in effect, unless collection is in
jeopardy.
-
In certain cases contact personnel and revenue
officers performing contact duties can grant installment
agreements on BMF notice or balance due accounts without
securing a CIS or preparing a 433–D (See IRM 5.14.4.2, IRM
5.14.5.2, IRM 5.4 and IRM 5.19.1.5.3).
-
The Trust Fund Recovery Penalty assessment
statutory period must be considered on corporate taxpayers, LLC
taxpayers when the LLC is identified as the liable taxpayer and
other entity types, if applicable (IRM 5.14.7.4.1 describes
necessary actions regarding TFRPs). Assessment determinations
must be made (See IRM 5.7.4.8).
-
IRM 5.14.7.4 describes the financial analysis
necessary for in-business trust fund installment agreements.
-
IRM 5.14.7.4.2 describes the approval process
for in-business installment agreements.
5.14.7.3
(08-05-2010)
Installment Agreements Involving Limited Liability Companies
-
The identity of the taxpayer determines the
party subject to an installment agreement. See IRM 5.1.21.4 and
5.1.21.8.
-
The LLC is the liable taxpayer for income and
excise tax liabilities assessed in the name and Employer
Identification Number (EIN) of the LLC.
-
For a multi-member LLC, the LLC is the liable
taxpayer for employment tax liabilities.
-
For a single member LLC, employment tax
liabilities on wages paid prior to January 1, 2009, assessed in
the name and EIN of the LLC, may be the liability of the LLC
or the liability of the owner
of the LLC. See IRM 5.1.21, Collecting
from Limited Liability Companies, to identify the
liable taxpayer.
-
For excise taxes that accrue on or after January
1, 2008 and for employment taxes on wages paid on or after
January 1, 2009, the LLC is the liable taxpayer, regardless of
the number of members.
-
When the LLC is the liable taxpayer, follow the
same procedures as an installment agreement for a corporate
taxpayer. The installment agreement is based on the LLC's
ability to pay.
-
When the owner is the liable taxpayer, the
installment agreement is based on the owner's ability to pay.
-
In some cases, assessments in the name and EIN
of an LLC may reflect some periods for which the LLC is the
liable taxpayer and some periods for which the owner of the LLC
is the liable taxpayer. Separate collection determinations must
be made for each liable taxpayer.
-
Ensure that Transaction Code 971, Action Code
364, LLC is liable taxpayer,
Action Code 365, Owner is liable
taxpayer, or Action Code 366, Identity
of liable taxpayer changed during tax period, is
input for appropriate tax periods. See IRM 5.1.21.8.3.
-
Ensure that an "LLC-Owner is Liable
Address" or "LLC-LLC is Liable Address" record,
identifying only the liable taxpayer, is created on ICS when
securing installment agreements where only
the single member owner (SMO) or the LLC is the liable taxpayer
for all open tax periods. See IRM 5.1.21.8.2.
5.14.7.3.1
(08-05-2010)
Installment Agreements When Owner is Liable for Assessments in
LLC Name
-
When employment tax liabilities of the owner
of an LLC are assessed in the name and Employer Identification
Number (EIN) of the LLC, special provisions apply. See IRM
5.1.21.10.1.
-
Ensure that the owner's name has been added to
the assessment using the procedures outlined in IRM 5.1.21.6,
and a new "LLC-Owner is Liable Address" record has
been created in the Integrated Collection System (ICS) as
described in IRM 5.1.21.8.2. Select the Name/Address record of
the liable taxpayer when establishing the installment
agreement on ICS.
-
To facilitate posting of installment agreement
payments and avoid default notification to the wrong entity, a
disclaimer may be added to the Additional
Conditions/Terms section or as an attachment to the
Form 433–D: "This agreement is between the Service and
(single member/owner name). Payments will be accepted from
(single member/owner name) or (name of disregarded entity),
and will be applied to the liability assessed against (name of
disregarded entity and its EIN). In the event of default,
enforcement action will be taken against (single member/owner
name)."
-
Voluntary payments may be accepted from the
LLC, even when the owner is the liable taxpayer. Payments are
applied to the EIN identified in the assessment.
-
When the owner of the LLC has no current
depositing, filing or paying requirements because the liable
taxpayer has changed, an installment agreement for tax periods
where the owner is the liable taxpayer is not considered an
in-business trust fund agreement.
-
Additional liabilities assessed in the name
and EIN of the LLC for tax periods where the LLC is the liable
taxpayer should not default an installment agreement for tax
periods where the owner of the LLC is the liable taxpayer.
Compliance for the current entity should be addressed
separately.
Caution:
For employment tax periods beginning on or
after January 1, 2009, the LLC is the liable taxpayer.
Original installment agreements for tax periods where the
owner is liable may only be defaulted or terminated for the
reasons listed in IRM 5.14.11.3. Since the LLC may be liable
for new tax periods assessed in the name and EIN of the LLC,
the case may be reassigned to the field to re-evaluate
collection issues. If the LLC also qualifies for an
Installment Agreement, you may need to combine both
agreements using the provisions of IRM 5.14.7.3.2 below.
5.14.7.3.2
(03-11-2011)
Installment Agreements When Owner (SMO) and LLC are Liable for
Assessments in LLC Name
-
Because of changes to Treasury Regulation
301.7701-2(c)(2)(iv), the LLC is the liable taxpayer for
employment tax periods beginning on or after January 1, 2009
even when the LLC is otherwise disregarded for income tax
purposes. For these taxpayers, it will be common to have
assessments in the name and EIN of the LLC, where:
-
Single Member Owner (SMO) of the LLC is
the liable taxpayer for employment tax periods ending
before January 1, 2009, and
-
LLC is the liable taxpayer for tax
periods beginning on or after January 1, 2009.
-
If the identity of the taxpayer changed from
one period to the next resulting in a change of the taxpayer
record, determine whether an installment agreement is the
appropriate resolution for each liable taxpayer.
-
If an installment agreement is the appropriate
case resolution for only one liable taxpayer, complete the
action for the other liable taxpayer before submitting the
installment agreement for processing. For example, if the SMO
periods are to be placed in CNC status, take this action first
before submitting the IA request.
-
Use Option B to submit the IA request to CCP
for input. Make an ICS history notation in the Closing
Narrative. This history notation will alert Centralized Case
Processing (CCP) to exclude these modules from the IA. Use the
systemically generated Form 3210 with the appropriate Mail
Stop to route the case to CCP.
-
If an installment agreement is the appropriate
case resolution for both the
SMO and the LLC, a combined installment agreement may be
secured.
-
Secure a separate Collection Information
Statement (CIS) from each liable party.
-
SMO (pre-January 1, 2009 liabilities):
Form 433-A if an individual or a Form 433-B if another
entity
-
LLC (post January 1, 2009 liabilities):
Form 433-B
-
The installment agreement payment is based on
the combined payment ability
demonstrated by the separate collection information statements
from the SMO and LLC.
-
Address any applicable CSED and TFRP issues.
-
The following Option A, IA types allow for the
submission of an SMO/LLC IBTF-IA:
-
ICS will block the creation of the IA until
the following separate Name/Address records are created:
Note:
These Name/Address Records are needed for
the systemic creation of the Attachment
to the SMO/LLC Agreement document. A systemic
history is generated when the Name/Address records are
created.
-
Input the appropriate TC 971 Action Code
364,365, 366 to identify the liable taxpayer for each module.
-
When requesting a combined IA on ICS, select
the Name/Address record that includes BOTH
the name of the LLC and the name of the SMO. This is normally
the IDRS Mailing Address on ICS. If the Mailing Address does
not contain BOTH the LLC and
the SMO name, add a new address record using type Contact or
Other.
Note:
The names of both the LLC and the SMO will
appear on the combined installment agreement. This is an
exception to the general rule that collection actions should
not include both the name of the LLC and the name of the SMO.
-
Close the case on ICS by selecting Option A
from the Installment Agreement Menu:
-
Selecting the appropriate Case
Conditions; and then
-
Selecting one of the IA types listed in
(9) noting if the TFRP has been addressed; and then,
-
You will receive a pop up message
"Is this an SMO/LLC IA?"
-
Take the appropriate actions based on
the “If…, And… Then…” Table.
-
The approval request generated to the group
manager will reflect a closure type identifying the IA as an
SMO/LLC.
-
No SMO/LLC questions are presented when Option
B is selected as the method of closure.
5.14.7.3.3
(03-11-2011)
Approval and Monitoring of SMO/LLC IBTF-I/As
-
Once the Group Manager approves the IA, a
systemic ICS history is created stating the IA was
systemically uploaded to IDRS (Status 60).
-
A systemic history is generated that contains
the SMO/LLC payment information and the statement,
"Single Member Owner/LLC Installment Agreement – See
Attachment" , which is populated in the Additional
Conditions section of the Form 433D and in the Letter 2850.
-
After the Group Manager approves the IA, an
ICS Print Manager Dialogue box provides the option of e-mail
(to the initiating RO or Group Secretary) or immediate
printing of the "Attachment to
the SMO/LLC IA" along with the Form 433-D,
Letter 2850, and the Form 3210.
-
Distribute the printed material as follows:
-
Mail Letter 2850 with the Attachment
to SMO/LLC Installment Agreement to the
taxpayer and representative, if applicable.
-
Include the Form 433-D with a copy of
the Attachment to SMO/LLC
Installment Agreement in the case file. Write
"SMO/LLC IBTF-IA"
in red across the top
of the Form 433-D.
-
Attach the ICS generated Form 3210 to
the case file. Write "SMO/LLC
IBTF-IA" in red in
the body of the Form 3210. Forward to CCP for
monitoring.
-
ICS will generate the following Subcodes and
Location Codes for these types of agreements:
-
906 – SMO/LLC IBTF IA; Location Code
– IBTF
-
907 – SMO/LLC MMIA; Location Code –
IBTF
-
908 – SMO/LLC IBTF Express; Location
Code - IBTX
-
CCP will take the actions listed in IRM 5.4.11
for input and monitoring on these types of I/As which includes
issuing separate default notices to the SMO and LLC.
5.14.7.4
(03-11-2011)
In-Business Trust Fund Installment Agreements Requiring
Financial Analysis and Determining Ability to Pay
-
If Notices of Federal Tax Lien were not
previously filed, make a lien determination. (See IRM 5.14.1.4.2
and IRM 5.12.2.4.)
-
Verify current compliance with filing and
deposit requirements.
-
Consider the procedures in IRM 5.7.2 for special
deposits and monthly filing.
-
Determine the taxpayer's ability to pay. (In
addition to the information provided in this sub-section, also
see IRM 5.14.1.5).
-
Secure Form 433B, Collection Information
Statement (CIS) for Businesses and, if appropriate, Form 433A,
CIS for Individuals. If these in-business taxpayers can fully
pay liabilities from current assets and/or income they do not
qualify for installment agreements. Full payment should be
requested.
Exception:
It is not required that Form 433B be secured
if taxpayers qualify for Express
agreements. Since the qualifying liability amount is
determined at the time the case is received in inventory, the
taxpayer may not make payments to reduce the unpaid balance of
assessments to the amount ≡ ≡ ≡ ≡
≡ in order to qualify for "Express" agreements
(See IRM 5.14.5.4(1)(a)).
Note:
See IRM 5.15, Financial Analysis, for more
information on how to complete these forms and how to
determine ability or inability to pay.
-
For agreements on accounts up to ≡ ≡
≡ ≡ ≡ ≡ that will satisfy liabilities
within 5 years:
-
No verification of the CIS is required;
-
Input bank and receivables information on
ICS.
-
If appropriate, request that taxpayers
sell assets or borrow on equity in assets in order to make
payment on the delinquent taxes; and,
-
As noted in IRM 5.14.7.2(1)(b), ensure
that the taxpayer has the ability to pay current operating
expenses as well as current taxes.
-
For all other agreements (those that do not meet
Express criteria, or are
above ≡ ≡ ≡ ≡ ≡ ≡ , [see IRM
5.14.7.3.1(6)]:
-
Verify income and expenses. Use bank
statements to verify both income and expenses;
-
Request documentation if assets,
liabilities, expenses or income appear questionable;
-
Complete record checks to determine
ownership and equity in real and personal property,
including motor vehicles;
-
If appropriate, request that taxpayers
sell assets or borrow on equity in assets in order to make
payment on the delinquent taxes.
-
As noted in IRM 5.14.7.2(1)(b), ensure
that the taxpayer has the ability to pay current taxes as
well as operating expenses and delinquent taxes.
-
Check corporate officer, partner and LLC member
individual compliance. Although installment agreements are based
on the taxpayers' ability to pay, it is the Service's policy to
check that the principals of taxpayer businesses are in
compliance with their filing requirements when considering an
installment agreement for the business. For further information
on compliance checks see:
-
IRM 5.1.11.2.3 regarding compliance checks
in general;
-
IRM 5.14.1.4.1(2)(b) regarding sole
proprietors and LLCs; and
-
IRM 5.14.4.3 regarding "Installment
Agreements and Multiple Entities."
-
Consider a Trust Fund Recovery Penalty (TFRP)
assessment. (See IRM 5.14.7.4.1 and review the procedures
provided in IRM 5.7.4.8 and IRM 5.7.8.)
Note:
IBTF Express
agreements do not require TFRP consideration, nor cross
compliance checks on officers, partners or LLC members.
5.14.7.4.1
(03-11-2011)
Trust Fund Recovery Penalties and Installment Agreements
-
-
Area management must ensure consideration is
given to securing waivers to extend the statutory period for
assessment from each responsible individual when the
delinquent taxes will not be fully paid prior to the original
ASED.
-
When soliciting waivers from responsible
individuals, notify them of their right to refuse to extend
the period of limitations, or to limit such extension to
particular issues, or to a particular period of time.
Taxpayers must be notified of their right of refusal each and
every time they are requested to sign a waiver extending the
period for assessment.
-
It should be fully explained to taxpayers that
signature on a waiver, extending the TFRP period for
assessment, will allow the Service to collect the delinquent
and accrued taxes from the business through an installment
agreement which extends beyond the original TFRP Assessment
Statute Expiration Date (ASED).
-
ASEDs should be extended to the end-date of
agreements, plus one year,
to allow for skipped payments and interest rate changes. (Use
CC ICOMP)
Note:
Extend the ASED on all trust fund tax
modules to the end-date of the agreement plus one year, even
if some trust fund balances due will be fully paid with the
first installment payment.
-
In general, do not request assessment of Trust
Fund Recovery Penalties (TFRPs) if business taxpayers meet the
terms of installment agreements. However, TFRPs must be
considered on the potentially responsible persons of the
business entity based on the following procedures.
-
If the agreement will not fully pay all
balances due at least a year before the earliest Assessment
Statute Expiration Date (ASED), then:
-
Assemble all documentation for
completion of the penalty to the point of proposing
assessment;
-
Complete interviews for all potentially
responsible persons, and any other interviews necessary
to determine responsibility and willfulness;
-
Secure 433A (Collection Information
Statement) from all potentially responsible persons.
Conduct financial analysis to determine whether the
penalty, if assessed would be collectible;
-
Request signature of Form 2750,
"Waiver Extending Statutory Period for Assessment
of Trust Fund Recovery Penalty" from all
potentially responsible officers. See IRM 5.14.7.4.1(1)
through (4); and
-
If a potentially responsible officer
refuses to extend the ASED, and the trust fund recovery
penalty is determined collectible, complete and
recommend assessment of the TFRP for that responsible
person.
-
If potentially responsible persons have the
ability to pay from current assets or income, request payments
be made to reduce the trust fund portion of the liability. If
they have the ability to make a significant payment or
payments on the trust fund portion of liabilities, but do not
make such payments (or do not make plans for payment from
personal assets), consider recommending assessment of the
TFRPs. If TFRPs are assessed on these cases, lien
determinations should be made and, if appropriate, liens
should be filed, and in most cases no other collection action
should be taken during installment agreements.
However, if after assessing the TFRP the
responsible person still does not make plans for payment
from personal assets, other collection action may be
taken. Before taking collection action against the
responsible person, document the ICS history on why the
action is being taken (since the corporate or LLC entity
is in an IA) and group manager concurrence must be secured
before such action commences.
Exception:
If taxpayers are currently
"repeaters" , the trust fund recovery penalty
normally will be assessed. (See IRM 5.14.7.2(1)(c).)
In these instances in which the decision is to
withhold collection of the assessed TFRP while the business is
paying through an installment agreement, include the
responsible person(s) SSN as a related TIN on the IBTF
installment agreement. This will place the MFT 55 modules in
Status 63 pending the business's compliance with the IA. (See
IRM 5.14.4.3.)
Note:
Only MFT 55 modules related to the IBTF
agreement can be included in this process. Other MFT
liabilities (for instance, MFT 30 liabilities) must be
resolved separately.
-
Upon completion of the trust fund recovery
penalty recommendation process on ATFR (Automated Trust Fund
Recovery Application) complete Form 3210 to transmit the case
to Control Point Monitoring (CPM).
-
If TFRPs are assessed, notify these taxpayers:
-
they should respond to notices regarding
the TFRP; and,
-
payments made to the TFRP accounts will
be offset against the corresponding corporation or LLC
accounts upon which the TFRP was based.
-
Trust Fund Recovery Penalty accounts and case
files require SPECIAL HANDLING
during in-business trust fund installment agreements.
-
If the TFRP investigation has been
completed, but is not being assessed (see IRM
5.14.7.4.1(7)), the TFRP administrative file must be
completed and attached to the approved IBTF-IA case file
being sent to Centralized Case Processing (CCP) at Mail
Stop 5-E04.117. Add a cross-reference to the BMF account
on ICS. Label the file "Unassessed
TFRP-IBTF IA Backup Documents – Earliest ASED is:"
. The administrative TFRP file and case file must be
retained together as one file in CCP for the length of
the IBTF-IA.
-
If the TFRP assessment has been made,
make lien determinations on these accounts.
-
If the TFRP assessment has been made and
collection is being withheld while the business is
paying through an IBTF agreement and a lien
determination has been made, the TFRP assessment (MFT
55) should be included as a related TIN on the IBTF IA.
(See IRM 5.14.7.4.1(8)). Label the file "Assessed
TFRP BALDUE file to associate with IBTF IA – EIN
xx-xxxxxxx ."
-
If TFRP investigations are incomplete but all
other actions and analysis necessary for granting installment
agreements have been completed:
-
Group managers should approve
agreements; and
-
OIs must be opened for revenue officers
to complete the TFRP investigation.
-
Complete lien determinations as provided
in IRM 5.14.7.4.1(11)(b). Liens may be filed if
appropriate. Follow procedures in IRM 5.14.7.4.1(8) if
enforcement action is warranted on these accounts.
-
Once the TFRP has been completed,
assessed and a lien determination made (and, if
appropriate, notice of federal tax lien filed), forward
the file to the Control Point Monitoring (CPM). (See IRM
5.7.6, Trust Fund Penalty Assessment Action).
Note:
See IRM 5.7.4.8.1(5) if agreements
will fully pay balances due more than one year prior
to ASEDs.
-
TFRPs must be considered and, if appropriate,
assessed in connection with consideration of installment
agreements for any out-of-business corporation or
out-of-business LLC that is identified as the liable taxpayer.
5.14.7.4.2
(03-11-2011)
Approval and Monitoring
-
Inform taxpayers installment agreements
require approval.
-
Unapproved agreements may not be held to
monitor compliance.
Note:
See IRM 5.14.3.1 on requesting and accepting
payments when installment agreements are NOT
in effect and during pending installment agreements.
-
These cases will be monitored in Centralized
Case Processing. Choose the appropriate closing action on ICS
- "CCP (PSC) - IBTF - IA (NF Item in CCP)." Upon
approval of the IBTF IA, ICS will close the balance due
modules and systemically create an NF Item and reassign to CCP.
These NF items will be monitored in CCP.
-
If you have a case that is an IBTFIA that is
paid using the direct debit payment option, see IRM 5.14.10.5
for procedures.
-
Form 433D completion on ICS sends an approval
notification to the manager under Option A only. No approval
notification is sent to the manager under Installment
Agreement Option B on ICS. You must forward the case file,
along with the paper Form 433D, to the group manager for their
approval and signature.
-
Once the Group Manager approves the IBTF-IA
under Option A, an ICS history is created stating the IA was
systemically uploaded to IDRS (Status 60). Generation of the
acceptance letters and Forms 3210 have not changed. You are
still responsible for mailing of the L2849 or L2850 to the
taxpayer and power of attorney, if applicable, whether Option
A or B is used.
-
Option A on ICS: Approval by the group manager
using the ICS Installment Agreement Option A generates:
-
Transaction code (TC) 971 Action Code
(AC) 063,
-
Approval notification to the revenue
officer.
-
An original and copy of the Form 433D .
-
Letter 2849 or 2850: These letters
provide taxpayers with notice of the approval of their
agreement as well as the terms and conditions of the
agreements.
-
A NF item (Other Investigation) for
Centralized Case Processing to monitor the case.
-
An Agreement Locator Number (ALN)
"0215" if the only condition of the agreement
is that it is an IBTF. (See Exhibit 5.14.1-2).; Subcode
of "900" ; and a Location Code of "IBTF"
.
-
Form 3210 for transmitting the case file
to CCP at Mail Stop 5-E04.117.
-
Use Option B only if hard copy (non-ICS)
installment agreements are used and approved.
-
Option B generates only those items listed in
IRM 5.14.7.4.2(7)(b), (e) and the subcode of "900"
listed in (f).
-
After approval, revenue officers must ensure
that taxpayers:
-
are informed payments must be made
whether or not notices are received from a Campus, and
-
receive Letter 2849/2850 or approved
Form 433D.
Note:
The Letters 2849/2850 will provide a
Campus payment address based on the taxpayer's
location.
-
In-business trust fund installment agreements
(IBTF-IA) input to IDRS Status 60 must be monitored in Centralized
Case Processing. Forward approved agreements to
Centralized Case Processing along with the unassessed Trust
Fund Recovery Penalty administrative file, if one was prepared
after taking the actions described above (See IRM 5.14.7.4.1
and IRM 5.14.9.4(5)).
Note:
ICS templates provide the "MMIA or IBTF-IA
Closing Document" to assist in preparing these
agreements for submission to CCP.
-
In-business Trust Fund IA (IBTF-IA) case files
will be submitted to CCP with the form 433-D on top, for
monitoring. Write "IBTFIA for input and monitoring"
in RED ink across the top
of the form 433-D. The form 3210 is systemically generated on
ICS with the following address:
-
Centralized Case Processing:
-
will not accept installment agreements
for monitoring unless CSEDs and ASEDs have been properly
addressed, and the case file has been properly
identified per IRM 5.14.7.4.1(11). CCP is not
responsible for reviewing the validity of the CSEDs and
ASEDs of installment agreements it receives (for
monitoring) either on initial receipt, nor on an ongoing
basis.
-
is,
however, responsible for ASEDs and CSEDs associated with
liabilities accrued while cases are assigned to it for
monitoring.
-
will ensure proper case actions are
taken if taxpayers do not remain in compliance with the
filing and paying requirements during installment
agreements. Newly accrued liabilities are the
responsibility of Centralized Case Processing up to the
point the case is transferred to a field group or other
disposition or resolution for the case is determined.
-
ICS will systemically close the balance due
modules and assign an NF item to Centralized Case Processing.
The assignment numbers for Centralized Case Processing are as
follows:
-
AO = 35
-
TO = the Territory – 70 range
-
XX = the unit in Centralized Case
Processing that will be responsible.
Note:
The unit monitoring number (XX) will
be one of four numbers: 66, 67, 68, or 69.
-
00 = the group manager of Centralized
Case Processing.
-
Systemic transfer of accounts to Centralized
Case Processing servers will occur when IBTF IAs are approved.
Exception:
IBTF Express agreements are not monitored in
Centralized Case Processing (see IRM 5.14.5.4.)
-
Advise the taxpayer that the case is
being transferred for continuous monitoring, and
financial reviews may be conducted.
-
The NF item created when installment
agreements are approved provide a list to check that
includes installment payment; quarterly amounts to be
deposited; and returns the taxpayer is required to file.
5.14.7.4.3
(08-05-2010)
Monitoring In-Business Trust Fund Accounts By Centralized Case
Processing
-
See IRM 5.14.7.4.2 and IRM 5.14.9.4(5) for ICS
and assignment instructions.
-
After the revenue officer has closed the case
with an In Business Trust Fund Agreement on ICS, a NF item is
automatically opened for monitoring in Centralized Case
Processing Support. See IRM 5.4.11 for details on the
monitoring process.
Note:
If the taxpayer has been advised of the
approval of the installment agreement (mailed or given
approved agreement or a letter stating the agreement was
approved) it is considered to be a valid agreement. Even if
periods were not included, the agreement may only be
defaulted and terminated for the reasons listed in IRM
5.14.11.3.
-
The Centralized Case Processing employee will
monitor the case monthly to ensure taxpayers:
-
File federal tax returns when due; and
-
Pay additional liabilities when due.
-
If taxpayers remain in compliance with filing,
paying and depositing requirements, no further case actions or
contact is necessary, until the agreement is completed.
-
If the taxpayers do not complete any one of
the items in IRM 5.14.7.4.3(4), refer to IRM 5.4.11 for the
procedures CCP will follow.
5.14.7.5
(08-05-2010)
Payments on Trust Fund Accounts During Approved In-Business
Trust Fund Installment Agreements
-
Due to the Trust Fund Recovery Penalty (TFRP)
(reference is Internal Revenue Code 6672) more than one entity
or individual may be liable, or become liable, for the trust
fund portion of liabilities (penalty amounts). Therefore, when
businesses enter into installment agreements the entities or
individuals liable for the TFRP may prefer (and request that)
the business's payments be applied to the trust fund portion of
the balance due accounts. If this occurs, the business should be
notified that:
-
Installment agreement payment application
is governed by the terms of the agreement.
-
As stated on the agreement form: "We
will apply all payments on this agreement in the best
interests of the United States."
-
Taxpayers are not
permitted to designate installment agreement payments.
-
Installment agreement payments will be
applied in the best interests of the United States,
regardless of the policy to apply payments to tax first
and then to penalties and interest when dealing with trust
fund modules.
-
Individuals who are potentially responsible for
TFRPs should be encouraged to make payments from their own
resources. These payments are not considered to be installment
agreement payments. (See IRM 5.14.1.2(7) and IRM
5.14.1.3(10)(Example (4).) In addition, the following examples
further illustrate common interactions between installment
agreements and TFRPs:
-
Example:
(1) ABC Inc., has not made a request for
an installment agreement. Mr. Smith, officer of ABC
Inc., tells the revenue officer that he will pay $500
per month toward the trust fund portion of a tax
liability with personal funds. The trust fund penalty
has not been assessed and Mr. Smith has not yet been
determined to be responsible for a TFRP. Also, the
balance due period(s) from which the liability may be
derived have not been specifically identified. Since the
liability has not been identified this is not a pending
installment agreement. Also, Mr. Smith must be informed
that any payments will be considered
"voluntary" , and may be applied according to
his instructions. Information regarding the contact must
be documented in the case history. (See also IRM
5.14.3.1(3) and (5) regarding the distinction between
"voluntary" , "installment
agreement" , and "requested" payments).
Example:
(2) (Same scenario as Example 1 above
except...) Mr. Smith has signed Form 2751 regarding the
trust fund recovery penalty of ABC Inc. As long as Mr.
Smith provides a specific payment amount (and his
request includes the information required by IRM
5.14.1.3(4)) this is a pending installment agreement.
Note that the installment agreement is pending for Mr.
Smith's TFRP, not for ABC Inc's
balances due.
Example:
(3) LMNOP Inc. enters into an
installment agreement requiring payment of $500 per
month. The corporation does not make payments from
corporate funds. Instead, corporate officers Jones and
Johnson take turns designating payments of $500 per
month with their personal funds on behalf of LMNOP Inc.
Although they write on their checks that the payments
should be applied to the trust fund portion of the
liabilities, these payments may be applied in the best
interest of the government. (See IRM 5.14.7.5(1).).
Example:
(4) Same as Example 3, except LMNOP
makes its monthly payment of $500 from corporate funds.
In addition to the installment agreement payments made
by the corporation, the officers make payments as
described above. These payments, made in addition to the
payments made by the corporation under the agreement,
may be applied according to the officers' instructions.
Note:
See also Example 4 in IRM 5.14.1.3(10).
Example:
(5) Same as Example 4, except LMNOP
makes its monthly payment of $500 from corporate funds.
In addition to the installment agreement payment the
corporation makes an additional $500 designated payment
to the trust fund portion of their liability. Designated
payments made in addition to the payments made by the
corporation under the agreement, are considered
voluntary payments which can be designated and applied
according to the taxpayer's instructions.
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| The above limited information is intended for
informational purposes only. If legal advice or other expert
assistance is required, the services of a competent professional should
be sought, and this general information should not be relied upon
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