|
-IRS Partial Payment Installment
Agreements
and the Statute of Limitations
on Collections-
RESOURCE MATERIAL
Internal Revenue Manual
5.14.2
Partial Payment Installment Agreements and the
Collection Statute Expiration Date (CSED)
Manual
Transmittal
December 18, 2015
Purpose
(1) This transmits a topic based revision to
IRM 5.14.2, Installment Agreements, Partial Payment
Installment Agreements and the Collection Statute Expiration
Date (CSED) to incorporate procedural changes based on ACA
provision 1501 and to replace references to using Decision IA/ICOMPF
with IAT Compliance Suite Payment Calculator for determining
the length of installment agreements.
Material
Changes
(1) This IRM has only been updated for the
Affordable Care Act (ACA) Provision 1501: Requirement to
Maintain Minimum Essential Coverage (Individual Shared
Responsibility) (IRC §5000A and references to the use of
Decision IA/ICOMP). Content unrelated to these two items were
not reviewed for currency or accuracy.
(2) IRM 5.14.2.1.3(1) Updated note directing
employees not to include Affordable Care Act, Shared
Responsibility Penalty modules (MFT 35) to Form 900 waivers to
add Mirrored MFT 65 assessments to the exclusion to Form 900.
(3) IRM 5.14.2.2 (2) Replace reference to
using ICOMP/Decision IA with the IAT Compliance Suite Payment
Calculator
(4) IRM 5.15.2.2 (13) c) Replace reference to
using Decision IA with the IAT Compliance Suite Payment
Calculator
Effect
on Other Documents
This material supersedes IRM 5.14.2, dated
December 09, 2015.
Audience
SB/SE Collection Employees
Effective
Date
(01-01-2016)
Kristen Bailey, Director, Collection Policy
5.14.2.1
(03-11-2011)
Overview
-
All taxpayers are expected to
immediately full pay delinquent tax liabilities. When
this is not possible taxpayers may be allowed to pay
their liabilities over a prescribed period of time. 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). The
American Jobs Creation Act of 2004 amended IRC 6159 to
provide this authority.
-
Before a PPIA may be granted, equity
in assets must be addressed and, if appropriate, be
used to make payment. In some cases taxpayers will be
required to use equity in assets to pay liabilities.
However, as discussed below, complete utilization of
equity is not always required as a condition of a PPIA.
Consider levy or seizure in accordance with IRM 5.10,Seizure
and Sale , and IRM 5.11.1.1.2, Notice
of Levy Overview if there is significant
equity in assets. If enforcement action is
appropriate, a PPIA will not be granted. Follow
rejection procedures in IRM 5.14.1.3, Securing
Installment Agreementsand IRM 5.14.9.7,Routine
and Manually Monitored Installment Agreement
Dispositions, Independent Review and Appeals
. In cases where PPIAs are granted after consideration
of levy or seizure, document the case file as
indicated in IRM 5.14.2.1.2(6).
5.14.2.1.1
(09-19-2014)
Partial Payment Installment Agreement Requirements
-
A full Collection Information
Statement is required for all PPIAs. Forms 433A
and/or Form 433B must be completed to determine the
taxpayer’s ability to pay (refer to IRM 5.15.1.7, Allowable
Expense Overview, to determine allowable
expenses.)
-
For all IMF accounts with an Unpaid
Balance of Assessment (UBA) less than or equal to
≡ ≡ ≡ ≡ ≡ , compare
the current year income information provided by the
taxpayer to the income on the last filed return
using Command Code (CC) IRPTR and at least one of
the following:
-
RTVUE
-
TRDBV
-
Current year tax return
In addition, compare assets included
on the financial statement to the results of
information secured via these CCs/Returns. If the
current year income has decreased 20% or more from
the last filed return income or assets are
identified that were not disclosed on the financial
statement, discuss and/or resolve any discrepancy
with the taxpayer and document the case history. Do
not request substantiation if the taxpayer can
provide a reasonable explanation.
-
For IMF accounts with a UBA above
≡ ≡ ≡ ≡ , or if there is
significant equity that cannot be liquidated, the
following minimum verification is required: Real
property records, Department of Motor Vehicles
(DMV), personal property, full credit report, AMDIS
when there is a -L freeze on the account indicating
open examination activity, RAR or SAR if the
assessment originated in Examination or Criminal
Investigation.
-
Conditional expenses not determined
to be necessary are not allowed for PPIAs. Only
necessary expenses are permitted. When taxpayers
need to adjust above allowable expenses, the minimum
time necessary should be provided. See IRM 5.15.1, Financial
Analysis Handbook, for a discussion of
necessary, conditional and other expenses and when
exceptions may be appropriate.
-
For in-business trust fund accounts,
use the guidelines in IRM 5.14.7.4(7),
In-Business Trust Fund Installment Agreements
Requiring Financial Analysis and Determining Ability
to Pay , which state that at a minimum
you should:
-
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), Summary
of Agreement Criteria for Business Accounts
, ensure that the taxpayer has the ability to
pay current taxes as well as operating
expenses and pay delinquent taxes.
Note:
ICS will not allow closing a case
as an IBTF-IA PPIA (No Asset) with a back up Form
53. If the IA defaults, it must come back out for
financial review before it can be placed in CNC
status.
Note:
Because the installment agreement
will not fully satisfy the liability, the Trust
Fund Recovery Penalty (TFRP) will usually be
assessed. As the potential exists for the taxpayer
to accrue additional liabilities, the RO needs to
ensure the ASED is extended on accounts in which
the trust fund balance is below the amount in IRM
5.7.4.1, Determination to
Pursue and Recommend Assessment of the TFRP.
IRM 5.7.4.8.1, Considerations
for In-Business Installment Agreements,
provides guidance that the RO can request a
signature on Form 2750, Waiver Extending Statutory
Period for Assessment of Trust Fund Recovery
Penalty, from all potentially responsible persons
to extend the statute to the expected end-date of
the agreement plus one year. For PPIAs, this date
will be the expected CSED expiration.
-
For out-of-business trust fund
accounts, use the guidelines in IRM 5.14.7.4.1(13), Trust
Fund Recovery Penalties and Installment Agreements .
Note:
Because the underlying liability
will not be fully paid, the TFRP will usually be
assessed. The only exception to this requirement
is in circumstances in which there is no
collection potential from the responsible
officers.
-
The taxpayer must agree to pay the
maximum monthly payment based upon the taxpayer’s
ability to pay. Taxpayers entering PPIAs who have
defaulted an IA in the past 24 months will be
required to make monthly payments via DDIA or PDIA
unless they are unbanked and unemployed/self
employed. If this is not possible, a PPIA may still
be granted. The reason that a payroll deduction or
direct debit agreement could not be secured must be
documented in the case history.
-
Make a lien filing determination or
ensure that a Notice of Federal Tax Lien (NFTL) was
previously filed on all aggregate liabilities with a
UBA greater than≡ ≡ ≡ ≡
≡ . Follow NFTL procedures in IRM 5.12.2.4,Determination
Criteria for Do-Not-File or Deferring the NFTL
Filing .
-
The Campus will refer cases for
revenue officer assignment in some situations. See
IRM 5.14.2.1.7.
5.14.2.1.2
(09-19-2014)
Asset Equity and Partial Payment Installment
Agreements
-
No Asset/No
Equity Cases: A PPIA may be granted if a
taxpayer has no assets or equity in assets; or has
liquidated available assets to make a partial tax
payment.
-
Asset Cases:
A PPIA may be granted if a taxpayer does not sell or
cannot borrow against assets with equity because:
-
the assets have minimal equity
or the equity is insufficient to allow a
creditor to loan funds;
Example:
some lenders require equity
of greater than 20% of property value in
order to grant the loan.
-
the taxpayer is unable to
utilize equity;
Example:
the property is held as a
tenancy by the entirety when only one spouse
owes the tax and the non-liable spouse
declines to go along with the attempt to
borrow, and the property does not appear to
have been transferred into the tenancy to
avoid the tax collection.
-
the asset has some value but
the taxpayer is unable to sell the asset
because it is currently unmarketable;
Example:
the business taxpayer owns a
vacant lot in a high-value area, but the lot
cannot be sold until it meets certain
environmental regulations
-
the asset is necessary to
generate income for the PPIA and the
government will receive more from the future
income generated by the asset than from the
sale of the asset;
-
it would impose an economic
hardship on the taxpayer to sell property,
borrow on equity in property, or use a liquid
asset to pay the taxes. Economic hardship is
defined in 26 C.F.R. 301.6343-1 as not meeting
reasonable basic living expenses. Assets
necessary for the production of income should
also be included in the definition of economic
hardship.
Example:
the taxpayer is on a fixed
income, such as social security, and has the
ability to make small monthly payments. The
only other asset is the taxpayer’s primary
residence and there is equity in the
property. The revenue officer does a risk
analysis and determines that seizing the
property would cause an economic hardship
because the taxpayer cannot find suitable
replacement housing and meet necessary
living expenses if the property would be
seized.
-
the taxpayer’s loan payment
would exceed the taxpayer’s disposable
income and they would not qualify for a loan.
-
the revenue officer should
document the case history with the basis for
requiring the liquidation of equity in an
asset and that it won't create an economic
hardship.
Note:
See IRM 5.15.1.10, Other
Expenses for additional information
regarding necessary expenses.
-
) When financial analysis indicates
that borrowing against or selling property should be
attempted, the taxpayer will normally be required to
make a good faith attempt to utilize equity before
the Service will approve a PPIA. This includes
applying normal business standards when applying for
loans using equity as collateral. Taxpayers will
also be required to submit copies of all documents
that are used in the loan application process.
-
If the taxpayer does not comply with
the requirement of making a good faith attempt to
use equity in assets or is not willing to make
monthly payments consistent with ability to pay, the
taxpayer will be considered a "won’t
pay" and seizure/levy action may be
appropriate. If enforcement action is appropriate, a
PPIA will not be granted. If the taxpayer is in
pending IA status, follow rejection procedures in
sections 5.14.1.3,
Identifying Pending, Approved and Rejected
Installment Agreement Proposals on IDRS,and
5.14.9.3, IDRS Monitoring.
The case history should be documented with a
statement as to why the PPIA was not granted.
-
If the taxpayer is unable to secure
a loan or liquidate an asset following a good faith
attempt to do so, the revenue officer will need to
make a seizure/levy determination (see IRM 5.10.1.3,
Actions Required Prior to
Seizure by IRC 6331(j) ).
-
If it has been determined that
enforcement action is not appropriate, a PPIA can be
granted. The case history should be documented as
follows: "Seizure (or levy) of (name
of asset) has been considered, but it is
not the appropriate resolution because (provide
reason)" .
5.14.2.1.3
(01-01-2016)
Waiver Procedures for Partial Payment Installment
Agreements
-
Consider securing a waiver with a
PPIA where there is an asset that will come into the
possession of a taxpayer after the CSED and
liquidation of that asset offers the best case
resolution (in lieu of liquidating existing assets
to partially pay the liability).
Note:
Do not include any Affordable Care
Act individual shared responsibility payment
liabilities (MFT 35/Mirrored MFT65) on the waiver.
Example:
The taxpayer owes individual
income tax and is the beneficiary to a trust. The
taxpayer will receive a monthly distribution from
the trust that would be used to fund the PPIA. The
taxpayer will not be entitled to the principal of
the trust for two more years. The CSED will expire
in one year. The only other asset is the
taxpayer’s primary residence. The equity in the
property is less than the net value of the trust
but is available for immediate collection action.
The taxpayer has been unable to secure a loan
against the equity of the property due to numerous
factors such as limited income and poor credit.
The risk analysis was completed by the revenue
officer and the taxpayer offered to extend the
statute and to liquidate the trust in two years.
The waiver was secured for two additional years.
Example:
A corporation taxpayer cannot pay
its payroll tax liability within the CSED. It can
make partial payments for the remaining CSED
period. The corporation is current with its
federal tax deposits. The corporation has an
interest in undeveloped real estate which is under
development and will be completed in two years.
The land once developed would increase
significantly in value and will be immediately
sold. The CSED will expire in one year. Seizing
and selling the assets of the business which would
include the vacant land and construction equipment
would not significantly reduce the liability and
would impact the business’s ability to complete
the development of the property. The corporate
officers offer to extend the statute to provide
the opportunity to complete the development and
pay the taxes along with other business debts. The
trust fund recovery penalty will be addressed per
IRM procedures.
-
A waiver is no longer required to be
secured when the taxpayer’s only ability to
satisfy the tax liability after the CSED expiration
is through a continuation of the installment
agreement and there is no significant change in
ability to pay as identified through the two year
financial review process.
Example:
The taxpayer cannot pay the
liability within the CSED but can make monthly
payments. The statute will expire in twelve
months. The taxpayer has no distrainable assets.
The taxpayer owes $1,800 and can pay $100 per
month. Secure a PPIA for twelve months and no
waiver is required. The statute would be allowed
to expire.
Example:
The individual taxpayer cannot pay
the liability within the CSED but can make monthly
payments. The statute will expire in three years.
The taxpayer owns real property with minimal
equity and they cannot borrow against the equity.
The taxpayer owes $10,000 and can pay $200 per
month. Secure a PPIA for three years and no waiver
is required. There will be a two year financial
review conducted. If there is no significant
change in ability to pay, the payment amount will
remain unchanged until the statute expires. A
waiver could not be secured during the two year
financial review process unless the taxpayer’s
financial condition has improved, the agreement is
terminated, and a new one is granted.
Example:
The taxpayer is likely to have a
significant change in their ability to pay based
on a foreseeable event, but the taxpayer refuses
to sign a waiver. Secure a PPIA and note the case
history with respect to the likely improvement in
financial condition. This issue will be considered
during the 2 year financial review.
-
The waiver can only be secured at
the inception of the PPIA and not during the two
year review process, unless a new PPIA is executed
at that time. A waiver should not be obtained at the
time the PPIA is reinstated. The length of the
extension must be based on the time that it will
take to make payments and cannot exceed five years
plus one year to provide for other administrative
actions.
Note:
Do not
secure waivers on installment agreements except on
PPIAs as stated in IRM 5.14.2.1.3.
-
When a Form 900, Tax Collection
Waiver, is secured, the CSED must be updated on ICS
for all periods that are extended by the waiver by:
-
Selecting the module to be
updated; then
-
Select <MODULE DETAIL>,
<UPDATE MODULE DATE>, and <NEW IDRS
CSED DATE (TC 550)>; and then
-
Update the CSED date, and
-
Select the appropriate definer
code from the drop down list. For FS 2
(married filing joint) modules, selection of
Definer Code 01 (Form 900), will generate a
prompt to input "Waiver Signed Date"
and "Waiver Secured for" information
(Primary, Secondary or Both). Update as
appropriate.
-
Click "Save" to save
your information.
5.14.2.1.4
(09-19-2014)
Preparing Partial Payment Installment Agreements for
Approval and Processing
-
Ensure the taxpayer is in compliance
with filing, withholding, federal tax deposit and
estimated tax payment requirements (see IRM
5.14.1.4.1, Compliance and
Installment Agreements).
-
Document ICS with the justification
for the PPIA as the best case resolution.
-
Include all balance due accounts for
which the taxpayer is liable, including pre-assessed
modules.
Note:
For assessments in the name and
EIN of a Limited Liability Company where the
identity of the liable taxpayer changes for
different tax periods, follow the procedures in
IRM 5.14.7, BMF
Installment Agreements when
establishing the installment agreement.
-
Use installment agreement closing
option A (preferable method) or B on ICS.
-
Agreement Locator Numbers (ALNs) are
four digit codes (XXYY) that indicate specific types
of processing will occur at the Campus level. ICS
selects the proper ALN for PPIAs.
-
For PPIAs granted to taxpayers whose
accounts are not on ICS, choose the proper ALN for
PPIAs as follows:
-
use ALN "12" in the
"YY" position of the ALN;
-
generally use "02"
in the "XX" position unless one of
the conditions in Exhibit 5.14.1-2 or in the
chart below, are present;
-
generally use "12"
in the "XX" position of the ALN for
multiple condition PPIAs (see table below for
exceptions, including for Direct Debit and
Payroll Deduction Agreements).
-
Review Suppress Indicators (RSI)
instruct Campuses to reissue installment agreements
under certain conditions after the two year review.
ICS selects the proper RSI for PPIAs granted using
ICS, however for PPIAs granted to taxpayers whose
accounts are not on ICS, use RSI "5" and
choose a review cycle two years in the future.
Example:
If the current date is February
14, 2015, choose the review cycle that contains
that date in the year 2017 (201707).
-
Mark the top of the Installment
Agreement form (Form 433D), in red as "PPIA"
.
-
If a Form 900 is secured in
conjunction with a PPIA, a copy of the installment
agreement and the original Form 900 will be sent to
CCP using a manually
prepared Form 3210 to:
-
The original Form 900 must be
maintained for the length of the extension. (See IRM
5.14.2.2.1(2)).
-
If Option B on ICS is used to close
the case as a PPIA, use the systemically generated
Form 3210 to route the agreement to the appropriate
Mail Stop at CCP. Closed case files should be routed
to CCP at Mail Stop 5-E04.115.
5.14.2.1.5
(09-19-2014)
Group Manager Approval of Partial Payment
Installment Agreements
-
All PPIAs require managerial
approval. The group manager must review these cases
to ensure that they reflect the following
documentation:
-
thorough analysis of financial
statement(s)
-
consideration of other
available and appropriate means of collection
including, but not limited to liquidation of
assets, levy, and offer in compromise
-
the rationale for allowing the
taxpayer to retain assets with equity
-
the RO did not ask the
taxpayer to take actions that put him or her
into a hardship situation
-
If a manager does not believe that
the PPIA is the appropriate resolution follow the
procedures in IRM 5.14.9.7, Independent
Administrative Review after Recommended Rejection of
Installment Agreement Requests. The case
history should be documented with a statement as to
why the PPIA was not granted.
Note:
Managers must approve PPIAs that
Appeals has decided to grant and forwarded to the
Field for processing.
5.14.2.1.6
(09-19-2014)
Referrals from Campus
-
If taxpayers have assets and request
PPIAs from campus functions (including ACS) and meet
the equity thresholds provided below, cases will be
transferred for revenue officer assignment. (See IRM
5.19.1, Balance Due,
for Campus procedures.).
Note:
Campus employees will request that
assets be liquidated; cases will only be
transferred after taxpayers do not borrow upon or
sell assets after requested to by campus
employees.
-
These referrals from campus will be
subcoded on ICS depending on where the case
originated:
-
Significant Equity Thresholds Used
By Campus for Transfers to Revenue Officers:
-
For property values up
to ≡ ≡ ≡ ≡ ≡ and
equity of at least ≡ ≡ ≡
≡ ≡ ≡ ; or
-
For property values of ≡
≡ ≡ ≡ ≡ ≡ or
greater and equity of at least
≡ ≡ ≡ ≡ ≡
≡ ; and,
the equity represents at least 30% of the
value of the property.
5.14.2.2
(01-01-2016)
Collection Statute Expiration Date (CSED): Law, Policy
and Procedures
-
The American Jobs Creation Act of 2004
amended IRC 6159 to provide the authority for the
Service to enter into partial payment installment
agreements (i.e., installment agreements that do not
provide for full payment of the liabilities). If full
payment cannot be achieved by the Collection Statute
Expiration Date (CSED), and taxpayers have some
ability to pay, the Service can grant Partial Payment
Installment Agreements (PPIAs). IRC 6502(a)(2)(A)
provides that statutory periods for collection may be
extended in connection with granting installment
agreements. CSED extensions are permitted only in
conjunction with PPIAs and only in certain situations
(see IRM 5.14.2.1.3). CSED extensions are limited to
five (5) years beyond the original CSED (and where
applicable, any previous extensions due to statutory
suspension of the CSED) for each tax account (plus up
to one year – see IRM 5.14.2.2(8)). Group Managers
must approve CSED extensions. (See IRM 5.14.2.2(19).
If the taxpayer enters into more than one PPIA, the
CSED may be extended more than once for each balance
due account as specified by IRM 5.14.2.2(7).
-
Be aware of the CSED when granting
installment agreements. Use the IAT Compliance Suite
Payment Calculator to verify that the agreement will
fully pay all liabilities for which the taxpayer is
liable prior to the CSED and include a copy with the
case file. If the projected date for full payment is
prior to the CSED the agreement may be approved. If
the projected date for full payment is not prior to
the CSED a Partial Payment Installment Agreement may
be considered (see IRM 5.14.2.1).
-
When working CSED issues pertaining to
International cases, taxpayers residing outside of the
United States and Commonwealth Territories, or
taxpayers who may have lived outside the United States
for the applicable length of time since assessment and
are now living back in the United States, refer to IRM
5.1.19.3.7, Collection Statute
Expiration, Taxpayer Living Outside United States,
for processing procedures.
-
The Internal Revenue Service limits
the length of installment agreements to the 10-year
statutory collection period except in connection with
PPIAs.
-
IRC 6502(a)(2)(A) provides that
statutory periods for collection may be extended
in connection with the granting of an
installment agreement. CSED extensions are
permitted only in conjunction with Partial
Payment Installment Agreements in certain
situations (See IRM 5.14.2.1.3).
-
On March 9, 2002, the Job
Creation and Worker Assistance Act amended
Internal Revenue Code (IRC) 6331(k)(3) by
referencing IRC 6331 (i)(5) to state the statute
of limitations for collection (CSED) is
suspended for an installment agreement during
these timeframes: (a) proposed installment
agreement is pending; (b) thirty days following
the rejection of an installment agreement; (c)
thirty days following termination of an
installment agreement; and (d) during any appeal
of the termination or rejection of the
installment agreement.
-
The systemic suspension of the
CSED during the time a proposed IA is pending is
built into Masterfile (MF) processing and is
triggered by the TC971 AC043, TC972 AC043 or
TC971 AC063, and TC 971 AC 163 (as applicable)
dates. No TC550 posts to Masterfile. The
suspension systemically updates the CSED field
on IDRS.
-
Do not secure CSED waivers on non-PPIA
agreements. Generally, do not secure waivers on PPIAs;
however, a Form 900 waiver may be secured only in
connection with partial payment installment agreements
that extend beyond the CSED in certain situations (see
IRM 5.14.2.1.3).
-
CSEDs may not
be extended during
installment agreements. CSEDs may
be extended only in connection with new
PPIAs after mailing CP 523 or Letter 2975, during the
default period if a new
PPIA is entered into (not a reinstatement), or after
agreements are terminated. (See IRM 5.14.2.2(15)).
CSED waivers may be secured for any or all of the
balance due accounts:
(See IRM 5.14.2.2(17) and IRM
5.14.9.2(7) regarding the manner in which a
"new" agreement can include the balances due
in an "old" agreement; and IRM 5.14.11.7
regarding defaults, terminations and CSED extensions.)
-
If the taxpayer enters into more than
one PPIA, the period for collection may be extended in
connection with each PPIA so long as the total of the
extensions for each balance due account is not longer
than 5 years from the original CSED, plus the periods
described in IRM 5.14.2.2(8) through (10).
Note:
Approve CSED waivers in connection
with new PPIAs only.
-
Extensions of the statutory period for
collection are limited to no more than five years,
plus up to one year to account for changes in the
agreement. (See IRM 5.14.2.2(10).)
-
Prior suspensions
of CSEDs due to offers in compromise or legal
proceedings do not:
-
bar extensions
of CSEDs with PPIAs,
-
change
the length of extensions beyond the
limits provided in this section.
Therefore, CSED suspensions may result
in longer periods for collection than provided
otherwise by this section (as illustrated in Exhibit
5.14.2–1). For example, the CSED is suspended:
-
while the IRS and the Office of
Appeals consider a request for an installment
agreement or an offer in compromise
-
from the date the taxpayer
requests a CDP hearing until Appeals issues a
CDP Notice of Determination or, if the taxpayer
seeks review in the Tax Court, until the Tax
Court's decision becomes final, including
appeals to a United States Court of Appeals
-
from the date the taxpayer
request's innocent spouse relief until a final
Notice of Determination is issued or, if the
taxpayer seeks review in the Tax Court, the date
the Tax Court decision becomes final and for 60
days thereafter. If, however, the taxpayer
appeals the Tax Court's decision to a United
States Court of Appeals, the collection period
will begin to run 60 days after the filing of
the appeal unless a bond is posted with the
appeal
-
for tax periods included in a
bankruptcy while the automatic stay is in
effect, plus an additional six months
Example:
The IRS is unable to collect for 6
months while the taxpayer is in bankruptcy and the
automatic stay is in effect. Thus, the period for
collection is suspended for 12 months under IRC sec.
6503(h). After adjusting the CSED to reflect the
bankruptcy, the CSED may still be extended by
agreement for a period of five years if there is a
partial payment installment agreement and the other
criteria for securing a Form 900 waiver have been
met.
See IRC section 6503 for other
examples of situations that suspend the CSED.
-
All tax modules for which the taxpayer
is liable must be included in extension calculations
on CC ICOMP. (See IRM 5.14.2.2(13) regarding ICOMP
calculations.) Extensions will be calculated from the latest
CSED balance due account modules, but the waiver
extends the CSED for all assessments on the tax
module. On accounts with multiple CSED dates determine
if the earliest CSED is still valid. To verify to CSED
consider using the CCalc found at http://mysbse.web.irs.gov/Collection/toolsprocesses/csedcalculator/ccalc/default.aspxon
. If a TC534 with a 0 or dollar amount appears on the
module the CSED has expired for the associated CSED.
Do not include this amount in your calculations. If
there is more than one assessment on tax modules, and
part of the balance due is from the earlier
assessment(s), list these assessment dates on the
waiver, along with the latest assessment date.
Note:
This may result in extensions longer
than six years for parts of some balance due tax
modules.
-
All tax modules for which the taxpayer
is liable may be combined on one Form 900. Ensure it
is clear which tax periods and assessment dates
correspond to which CSEDs on the form.
Note:
For liabilities assessed in the name
and EIN of an LLC, different entities may be
identified as the liable taxpayer for different tax
periods. Ensure that only those tax periods included
in the PPIA are listed on the Form 900 waiver.
-
Form 900 Waiver will only be executed
in connection with PPIAs. (See IRM 5.14.2.1.3 for
additional information.) Use IDRS CC ICOMP to
determine payment schedules, and share the results of
ICOMPs with the taxpayers. Provide taxpayers with
information regarding the manner in which penalty and
interest are computed.
-
Using CC ICOMP, two methods –
described in (a) and (b) immediately below – may be
used for determining the length of CSED extensions.
For both methods:
-
Include all tax modules in the
computation;
-
Compute the extension separately
for each module;
-
Begin the computation using the
module with the earliest CSED; and,
-
Add additional modules to the
computation until all are included.
Method (A) provides for
computation of separate CSEDs for each module.
Method (B) provides for extending CSEDs to one
date for all modules.
-
Method (A) – Extend CSEDs on
all modules to separate
dates (for each module) up to one
year past the latest CSED on the module,
ensuring no CSED extension is longer than five
years (plus one year as specified in IRM
5.14.2.2(8)).
-
Method (B): Extend CSEDs to the same
date for all modules, ensuring no
CSED extension is longer than five years, plus
one year.
-
CC ICOMP does
not work on MFT 55, NMF, Status 72,
or accounts on which maximum failure to pay
penalty has been assessed. For these types of
accounts the IAT Compliance Suite Payment
Calculator may be used.
-
Form 900 waivers may be requested only
with regard to certain PPIAs (See IRM 5.14.2.1.3 for
examples where a waiver would be considered).
-
Notify taxpayers they have the
right to refuse to sign a waiver.
-
If an installment agreement
request is being considered and a taxpayer
refuses to sign a waiver, inform the taxpayer
the request will be considered and recommended
for rejection, then refer the case to the
independent administrative reviewer. (See IRM
5.14.9.7(6), Routine and
Manually Monitored Installment Agreement
Dispositions, Independent Review and Appeals.)
-
Taxpayers whose agreements were
previously terminated, with all appeal timeframes
exhausted regarding the termination (see IRM
5.14.11.4, Defaulted
Installment Agreements, Terminated Agreements and
Appeals of: Proposed Terminations (Defaults), and
Terminated Installment Agreements ), may be
granted new
installment agreements (not reinstatements). CSED
waivers may only be secured along with new partial
payment installment agreements and only in certain
situations (see IRM 5.14.2.1.3), even if there were
prior extensions of CSEDs.
-
If installment agreements are in
default (but 90 days have not passed since issuance of
CP 523/Letter 2975, see IRM 5.14.11.4, Defaulted
Installment Agreements, Terminated Agreements and
Appeals of: Proposed Terminations (Defaults), and
Terminated Installment Agreements )
reinstatements may include new periods. (See IRM
5.14.2.2(5) regarding securing waivers with new
agreements.)
-
Partial payment installment agreements
that extend beyond the original CSED (and where
applicable, any previous extension due to statutory
suspensions) require group manager approval.
Delegation Order 25-2 (Rev. 1) delegates authority to execute
Form 900 waivers to Collection, Examination and
Specialty Programs Field Group Managers; Technical
Services and Planning and Special Programs (PSP) Group
Managers; GS-11 Revenue Agents or GS-11 Tax Compliance
Officers in Technical Services and PSP functions, and
Campus Compliance Services Department Managers. See
IRM 1.2.52.3, Delegations of Authority for Special
Topics Activities for delegated authority for other
functions. In addition, Delegation Order 25-2 provides
authority to approve
Form 900 waivers to Collection, Examination, Specialty
Programs Field Group Managers; Technical Services
Group Managers; Insolvency Unit Managers, and Field
Compliance Services Department Managers.
Caution:
Approving officials must ensure the
procedures in this IRM 5.14.2.2 are followed with
regard to approval and processing of Form 900
waivers.
-
Revenue Officers will:
-
complete Form 900, including
printing the Area Director’s name on the line
titled "Area Director’s name" ;
-
print the group manager’s name
and title in the "By Delegated
Representative" block (leaving room for
manager’s signature);
-
submit the Form 900 and
agreement together for Group Manager approval.
-
Group Managers, Case Processing
Managers or Technical Services Managers will:
-
ensure extension computations
are accurate when reviewing Forms 900 for
approval;
-
indicate approval of Form 900 by
signing in the "By Delegated
Representative" block;
-
approve Forms 900 and related
installment agreements on the same date.
-
When the Form 900 is approved, update
the IDRS CSED date on ICS using the "Update
Module Date" section and the TC 550 is uploaded
to IDRS.
5.14.2.2.1
(08-05-2010)
Additional CSED Information: Case Transfers To and
From Appeals
-
Regardless of the time remaining on
CSEDs, timely appeals of installment agreement
rejections, terminations, and proposed terminations
must be referred to Appeals. When referring balance
due accounts with CSEDs that expire within 120 days,
notify Appeals of the imminent CSED(s). Cases will
not be considered transferred to Appeals unless
confirmation of transfer is received, and
documented, by the referring function.
-
Appeals will attempt to resolve all
issues prior to CSED expiration. If Appeals returns
balance due accounts with CSED(s) that expire within
120 days (to referring functions) it will notify the
function(s) of the imminent CSED(s). Cases will not
be considered transferred to other functions (by
Appeals) unless confirmation of transfer is received
and documented by Appeals. (See IRM 5.14.9.8, Routine
and Manually Monitored Installment Agreement
Dispositions, Independent Review and Appeals,
for additional Appeals information.)
5.14.2.2.2
(09-19-2014)
CSED Expiration Legal References: 1.) 90 Day Rule
for Installment Agreement CSED Extensions; 2.)
Non-Installment Agreement CSEDs
-
CSED extensions based on waivers
secured with installment agreements actually
expire 90 days after the expiration of any period
for collection agreed upon in writing by the
Secretary and the taxpayer at the time the
installment agreement was entered into. (See IRC
6502(a)(2)(A), and Treas. Reg. 301.6502-1(b)(1).)
These waivers remain in effect regardless of:
-
whether agreements fully pay
taxes, and
-
lengths of extensions.
-
For CSED extensions/waivers obtained
prior to January 1, 2000 and not
secured with installment agreements, the statutory
period for collection will expire on December 31,
2002, or at the end of the original ten year
statutory period for collection if after December
31, 2002. (See IRC 6502(a)(2) and 3461(c)(2) of RRA
‘98 ).
Exhibit 5.14.2-1
CSED Extension and Suspension Example
Above is from the Internal Revenue Manual
Call
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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 without such professional
assistance.
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