New standards for IRS installment agreement reviews
Article Abstract:
The IRS has introduced modifications to the Internal Revenue Manual discussion on balance-due procedures to ensure consistency in the evaluation of the ability of taxpayers to pay under installment agreements. The revised provisions set the standard for evaluating whether to approve the request of a taxpayer for an installment agreement and for computing the amount to be paid by the taxpayer per month if the IRS consents to sign an installment agreement. Unfortunately, these revisions, particularly those that restrict the degree of discretion of revenue officers and that work against taxpayers with yearly incomes of more than $69,960, may only undermine the ability of the IRS staff to enter into effective installment agreements with taxpayers. Nevertheless, revenue officers and tax professionals can be expected to try their best to reach agreements that are reflective of the taxpayer's ability to pay.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Allocable installment indebtedness continues to haunt some, but escape hatches remain
Article Abstract:
The Tax Reform Act of 1986 enacted the deemed payment rule of Section 453C, which was repealed by the Reconciliation Act of 1987 (RA '87). However, the results of former Section 453C are still significant. Under the terms of the deemed payment rule, taxpayers with applicable installment obligations (AIO) must determine their allocatable installment indebtedness and allocate a share of indebtedness to each AIO outstanding at a year's end. The allocated amount is an AIO payment and is taxable in relation to its gross profit percentage. RA '87 repealed Section 453C effective after 1987, but the Section's effect on fiscal- and calendar-year taxpayers can extend to 1990 and beyond because the repeal was prospective with respect only to dealers. It required non-dealers to elect out of its application. Taxpayers may find that filing amended returns is necessary to correct prior years' reported incomes.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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