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Resolution Options
Installment Agreement
An installment agreement is a formal payment plan allowing a taxpayer to pay a tax debt in monthly installments over time. Once approved, active levy and garnishment action typically stops.
Authority:IRC § 6159, IRM 5.14.1. Installment agreements toll the collection statute — this extends the IRS's ability to collect by the length of the agreement.
Available if you owe $10,000 or less, have filed all required returns, and have not had an installment agreement in the prior 5 years. The IRS cannot refuse a guaranteed agreement if you meet these criteria.
For balances up to $50,000. Approved without full financial review — no Collection Information Statement required. This is the most common type for individual taxpayers.
For balances over $50,000 or when streamlined terms cannot be met. Requires Form 433-A (Collection Information Statement) with full financial disclosure. The IRS reviews your income, expenses, and assets.
An installment agreement does not stop interest and penalties from accruing. The balance continues to grow while you're on the plan:
Interest Rate (2026)
6-7%
Federal short-term rate + 3%. Compounds daily. Q1: 7%, Q2: 6%.
Failure-to-Pay Penalty
0.25%
Per month while on an approved plan (reduced from 0.5%)
Setup Fee
$31–$225
Varies by setup method and income level
Entering an installment agreement tolls (suspends) the Collection Statute Expiration Date (CSED) for the duration of the agreement plus 30 days if the request is rejected. This extends the IRS's legal ability to collect.
Example: You have a tax debt from 2016 with a CSED of 2026. If you sign a 5-year installment agreement, the CSED is extended until 2031. You gave the IRS 5 additional years to collect.
Installment Agreement
Currently Not Collectible
The Fresh Start Initiative changed how liens are handled with installment agreements:
Check your CSED first: Know when your debt expires before deciding. If the debt is close to expiring, an installment agreement may extend collection longer than necessary.
Determine which tier applies: Balances under $10,000 (guaranteed), under $50,000 (streamlined), or over $50,000 (non-streamlined) have different requirements.
Compare alternatives: If your disposable income is very low, CNC may be better (no statute extension). If you cannot pay the full balance, OIC may settle for less.
Request a collection hold: If active collection is happening, request a hold immediately while you evaluate which resolution option is right for your situation.
Our tax professionals can contact the IRS today and request a hold on collections while we review your situation.
No obligation. We will review your case and contact you.
Levies & Garnishment
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