Partial Payment Installment Agreement
A partial payment installment agreement (PPIA) allows tax payers to enter into installment agreements that result in only a partial payment of the tax amount owed.
Prior to partial payment installment agreement taxpayers could only enter into installment agreements if it resulted in a full payment of the tax amount owed. The partial payment option allows individuals who cannot meet the payment requirements of a normal type of installment agreement or who cannot satisfy taxes owed under a normal installment agreement to set up a payment agreement with the IRS. Basically, you will make payments to the IRS (they deem affordable by looking at form 433) until the statute of limitation expires (meaning part of your tax liabilities may not be paid back). Having this type of agreement setup with the IRS prevents them from taking collection actions against you as long as you are making payments. Every two years the IRS will request an updated statement of your financial standing to see if they can increase the installments paid, or terminate the agreement. Generally, with PPIAs, the IRS will not require you to sign CSED waiver (to extend the CSED), but may at a PPIA’s inception.
Applying for a Partial Payment Installment Agreement
The following are the documents required to file when applying for a partial payment installment agreement with the IRS.
- Fill out Form 9465, Installment Agreement Request Form. It is a good idea to use a tax professional to help you with the calculation of the monthly payment amount.
- Complete IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals or 433-B (for businesses). This form is used to show the IRS that you do not have the means to make the full payment amount.
- Write a letter and attach it to the filing stating that you are requesting a partial payment installment agreement.
- Gather 3 months of back up documentation for all income and expenses that you reported on IRS Form 433-A, B, or F.
This form of relief can be fairly difficult to obtain, so it is highly suggested that you use a tax professional to help with the filing. A tax professional can evaluate your financial situation and determine if the partial payment option is best you. If you qualify for the partial payment option, you may also qualify for the offer in compromise in which tax debts can be settled for a much lower amount.
Part Pay Installment Agreement Help
Installment Agreement Help
Do you need help with an Installment Agreement? Our partner tax team (IRS Agents, Tax Attorneys, Tax Lawyers, CPAs) can ensure proper filing of an affordable tax payment plan for your financial situation.
Other IRS Payment Plans
Setting up a payment plan with the IRS can sometimes be the easiest solution to dealing with back taxes. See what payment plan fits your situation the best.
Solutions To Settle Back Taxes
Different trusted tax solutions to settle back taxes if you cannot make payment in full or you don’t believe you should
Currently Not Collectible
Prove to the IRS that you do not have the means to pay your back taxes with your current financial standing. Hold of IRS until you can pay or until statute of limitations expires.
Offer In Compromise
Settle IRS back taxes for a fraction of what is owed if you can prove you meet strict IRS specifications.