On September 21, 2016 the Internal Revenue Service officially announced its pilot project for expanded streamlined processing of Installment Agreements. This news has circulated in tax professionals’ circles since September 6, 2016, but only yesterday was formally confirmed in the IRS announcement on www.irs.gov

This pilot project directly addresses Installment Agreements for taxpayers with an assessed balance of tax, penalty and interest between $50,000 and $100,000. Accelerated processing means that it expands to 84 months, in other words, if proposed monthly payment is the greater of their total assessed balance divided by 84 months, or number of months until Collection Statute Expiration Date. Please note, that based on oral confirmations so far from the ACS personnel, CIS (Collection Information Statements) are not required in establishing Expanded Streamlined Installment Agreements.

Example: Let’s say individual Taxpayer A owes $94,542.23 including accrued penalties and interest for 2010 and the CSED is 05/25/2024. Under Expanded Streamlined Installment Agreement guidelines, the IRS would accept not lower than $1,126 over 84 months. If CSED for 2010 would be instead 10/15/2022, then IRS would accept not lower than $1,296 over 73 months (assuming current date of 09/22/2016).

During the test, expanded criteria for streamlined processing will be applied to installment agreement requests submitted to SB/SE (Small Business/Self-Employed) Campus Collection Operations, this includes the Automated Collection System (ACS). Expanded criteria will not be applied to installment agreement requests submitted to W&I Accounts Management, SB/SE Field Collection (cases assigned to Revenue Officers) or through the Online Payment Agreement application.

To remind what types of taxpayers are served by SB/SE Division, see below:

• Small businesses (part-time, start-ups)
• Small businesses without employees (service providers, contractors)
• Small businesses with employees
• Taxpayers with rental properties
• Taxpayers with farming businesses
• Individuals investing in businesses (partnerships, S-Corps)
• Corporations, S-Corporations, & Partnerships with assets less than $10M
• Approximately 54 million customers

Until further clarifications are available from the IRS, our interpretation is that this new expanded SLIA (Streamlined Installment Agreement) applies only to individual income taxes, self-employment taxes and out-of-business sole proprietors.

As you can see, calculation of CSEDs is crucial for this new Expanded Streamlined Installment Agreement, especially when multiple periods are involved or one tax period has multiple CSEDs. Use IRS Transcripts Delivery and Reporting add-on to have estimated CSEDs calculated for all your clients’ tax periods to make your processes more efficient and alleviate headaches.

The test project on expanded processing of Installment Agreements is scheduled to run through September 30, 2017. But based on test results, the expanded criteria for streamlined processing of Installment Agreements may be made permanent.

More information on the expanded test criteria will be made available in the coming weeks. In the interim, IRS employees in Campus Collection/ACS can assist with any installment agreement requests.

In the next few days PitBullTax Software will incorporate these new changes in the software application. All current licensees will be notified when update takes place.