Final regs. update rules on paying tax in installments.

• Author: Nevius, Alistair M.

On November 24, the IRS issued final regulations governing the payment of tax liabilities in installments (T.D. 9473). The regulations reflect changes to the law made by various acts going as far back as 1996.

Sec. 6159 allows taxpayers who cannot pay their tax liabilities in full the option to enter into an installment agreement and pay off those liabilities over a period of time. The IRS is authorized to enter into a written agreement with the taxpayer that will require installment payments based on the amount the taxpayer owes and his or her ability to pay that amount within the time the IRS can legally collect payment.

Various acts have affected taxpayer rights under such agreements. Under provisions enacted since 1996, taxpayers may request administrative review of IRS decisions to terminate installment agreements; taxpayers may appeal rejections of proposed installment agreements; and the IRS must accept proposed installment agreements in certain circumstances. Installment agreements can cover a taxpayer's entire tax liability or only a portion of it. The IRS reviews partial payment installment agreements every two years to determine if the...