Tax Dictionary – Streamlined Installment Agreement
Streamlined installment agreements may be approved for taxpayers under the following circumstances:
- The aggregate unpaid balance of assessments is $50,000 or less. The unpaid balance of assessments includes tax, assessed penalty and interest, and all other assessments on the tax modules. It does not include accrued penalty and interest.
- If pre-assessed taxes are included, the pre-assessed liability plus unpaid balance of assessments must be $50,000 or less.
- The minimum payment amount is determined by dividing the unpaid balance of assessments by 72. The IA must resolve all balances due prior to the expiration of the CSED.
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There are several advantages to getting a streamlined installment agreement. The most important advantage is that the IRS usually won’t file a Notice of Federal Tax Lien if you qualify. Also, the IRS doesn’t request a financial statement to determine whether you qualify.
- If you owe over $50,000, it’s best to pay the balance down to $50,000, so you will qualify for a streamlined installment agreement and avoid a tax lien.
- If you owe over $25,000, the IRS will require that you sign up to have payments directly debited from your checking account to avoid a tax lien.
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