Tax Notes logo

Loading Installment Agreements — Comments

Posted on Aug. 23, 2016

Occasionally, we write a post that seems to touch a nerve with our readers, and today’s post by Keith, Loading Installment Agreements, was one such post.  It has been heavily viewed, and there has already been numerous comments.  Many of the comments echo Keith’s thoughts in the post, and I have recreated the current comments below.  We would suggest that readers who enjoyed the post also review the comments, as they provide additional context and practitioner suggestions.  As there may be additional comments after this is posted, you can find all the comments to Keith’s post here, or by clicking on the “Comments” link below the title of the original post.

Here are the comments as of 2:30PM EST on August 23rd.

  1. This is widespread. It happens to me and fellow practitioners I talk to all the time. I usually advise clients to make direct pay payments and then I follow up 3 months after I send in the installment agreement with direct withdrawal information. If it still isn’t auto-processed, I call in and the person in collections or priority practitioner will usually enter it in herself. This has increased the cost to clients since I usually need to call in 2-3 times on a file instead of just once.

     
  2. How many keystrokes does it take to “load” (what a heavy word) an instalment agreement? Routing number, account number, SSN, tax periods — I just paid a credit card bill over the phone, using an automated keypad system, and it took maybe three minutes.

    IRS remains one of the best tax collection agencies of the 1960s.

     
  3. I have had several instances where IRS employees warned me about how long it may take for the installment agreement direct debits to kick in, and some advised my clients to begin voluntarily paying the monthly installment amounts until they saw a direct debit. I have followed that advice.

     
  4. I give clients multiple vouchers for a specific year and desired $$ amount, and instructions to write Apply to 1040 tax for 201x per Rev Proc 2002-26, copy it and the check and mail it certified mail return receipt requested.
    The check gets cashed and applied, thus reducing the interest when the installment agreement actually kicks in.

     
  5. Your client could be anyone of mine. In my experience Offers in Compromise, Installment Payment plans, Lien Releases, CP2900 responses, Entity Selection, anything that goes into centralized processing takes an inordinate amount of time and that time is increasing. You are right to point out the financial costs to all parties. However, the poor performance by the Service is discouraging to practitioners who really want their clients to get back on the tax rolls, comply with federal and state law, and leave the anxiety and stress behind. I have had several clients revert to “off the radar, cash only” lives when encountering delays and/or nonsensical communications from the Service. I don’t fault individual employees at the IRS. Congress needs to fund a major overhaul of computer systems and recruitment of additional staff. Amen.

     
  6. Installment Agreements have been so bad for so long that I typically advise clients, like Steve, to mail in a monthly payment with instructions to apply it to the unpaid tax.

    In most cases the tax, interest and penalty are paid prior to when the IA, that they would have had to pay for, would have taken effect.

    Less is better.

DOCUMENT ATTRIBUTES
Subject Areas/Tax Topics
Authors
Copy RID