IRS Advisory Committee Recommends Big Change to Installment Agreement Guidelines

The IRSAC (Internal Revenue Service Advisory Committee) released its annual report today. IRSAC is composed of 28 non-IRS members divided into four subgroups. Two of the subgroups (Wage & Investment and Small Business / Self-Employed) recommended changes to the Streamlined Installment Agreement Program.

An installment agreement is normally available to taxpayers who are unable to pay their tax debt in full. A Streamlined Installment Agreement (SIA) is available to taxpayers with aggregate unpaid balances of $25,000 or less, so long as the monthly installment will pay off the entire balance within 60 months. The SIA is granted without managerial approval, without the need to divulge financial information to the IRS, and in many cases, without the need to file a Federal Tax Lien. The $25,000 threshold has been in place since 1998.

The IRSAC Wage & Investment and Small Business / Self-Employed subgroups identified “repeater” balance due taxpayers as a major problem. To alleviate this problem, they recommended increasing the SIA dollar threshold to $50,000 and pushing more taxpayers to set up their installment payments through direct debit arrangements with their bank.

I think it is wise to increase the SIA dollar threshold because it will open up additional options to taxpayers who cannot pay their back taxes in full. However, I’m not sure this will have any meaningful impact on the “repeater” problem. Taxpayers unintentionally stack liabilities year after year when they do not have the means to pay their current-year taxes and their prior-year taxes simultaneously. According to IRS installment agreement guidelines, a $50,000 debt would require a payment of $1,000/month (for 60 months), taking into account the daily accruals of interest on the account. Increasing the SIA threshold to $50,000 would do more to alleviate this problem if the agency also agreed to increase the IRS installment agreement length beyond 60 months.

IRS Selects New ETAAC Members

The Electronic Tax Administration Advisory Committee (ETAAC) is a 13-member panel that consults with and reports to the IRS on electronic tax administration issues. Their goal: increasing electronic interactions between tax professionals and the IRS. Past panels have consisted of professionals in the banking, technology, tax law, accounting, and tax preparation industries.

Introducing the new members:

  1. Timothy Blevins: big shot at CGI, a global business process services firm
  2. Cyrus Daftary: attorney at Burt, Staples & Maner, a Washington D.C. taxation law firm
  3. Yasmine Nolan: big shot at H&R Block
  4. Timur Taluy: CEO of
  5. Mark Steber: big shot at Jackson-Hewitt (selected as ETAAC Chairman for 2011-2012)

If you’re a big shot and feel you were overlooked, maybe you deserve a spot on this committee. It is too late this time around, but feel free to review the membership application for future reference. Applications are accepted each February. This is a volunteer 3-year position with a 150-hour time commitment. And they’re just looking for experience in a few key areas:

  • public policy development
  • formulating, developing, and presenting proposals for ETAAC consideration
  • e-file security experience
  • tax software experience
  • accuracy-related experience