Types of Installment Agreements
Guaranteed (IRC 6159(c))
The only type the IRS must grant. For individuals owing $10,000 or less (excluding recent penalties), all returns filed, no recent installment agreements, and agreement to pay within three years.
Streamlined
For balances of $50,000 or less. No financial disclosure required. Full payment within 72 months or before CSED. Available online, by phone, or mail. Balances $25,001-$50,000 require direct debit.
Non-Streamlined
Balances over $50,000 or when full payment within 72 months is impossible. Requires Form 433-A/F financial disclosure. IRS analyzes income, expenses, and assets to set payment amount.
Partial Payment Installment Agreements
When payments will not satisfy the debt before CSED expiration. The IRS sets payments based on disposable income; the remaining balance expires with the statute. Subject to periodic review for changed circumstances.
Strategic Considerations
Compare total cost of installment agreement versus OIC. Installment agreements provide predictability but may cost more in total. OICs may cost significantly less but involve complex process and five-year compliance. Penalties continue during agreements (at reduced rate) and interest accrues throughout.
An installment agreement is not the only option, but for many taxpayers it is the most practical. The key is structuring it to fit your financial reality while minimizing total cost.