Standard (including streamlined and guaranteed) installment agreements require full payment of the tax debt (plus accruals) by the CSED or within a set period like 72 months. A PPIA is specifically for situations where full payoff is not feasible due to limited income and assets. It involves detailed financial review, potential lien filing, and periodic IRS reviews—unlike streamlined plans, which often skip deep disclosure for smaller balances.

Clients qualify when they have some ability to make monthly payments based on disposable income (after allowable expenses), but their financial situation prevents full payment by the CSED. The IRS requires proof via a Collection Information Statement showing that equity in assets has been addressed (and used if appropriate), and that enforcement actions like seizure are not more suitable. It's not available if the taxpayer can full-pay through other means.

A detailed Collection Information Statement is mandatory—typically Form 433-F (Collection Information Statement) for simpler cases, or Form 433-A (for wage earners/self-employed) or Form 433-B (for businesses) when a revenue officer is involved or more complexity exists. Supporting documents (pay stubs, bills, bank statements, asset valuations) must be provided to verify income, expenses, assets, and liabilities. The IRS uses this to calculate your reasonable monthly payment.

The IRS calculates your disposable income by subtracting allowable living expenses (based on national and local standards, with some flexibility for actual reasonable expenses) from your gross income. They also consider net equity in assets. The approved payment reflects what you can realistically pay monthly without causing hardship, while maximizing collection before the CSED expires. Interest and penalties continue to accrue on the unpaid balance.

Submit Form 9465 (Installment Agreement Request) along with the required Collection Information Statement and supporting documents. You cannot apply online for a PPIA (unlike streamlined plans); it requires phone, mail, or in-person submission, often with direct contact from an IRS revenue officer. Include a proposed monthly amount and the first payment if possible. The IRS reviews your finances thoroughly, may request more information, and can approve, modify, or deny the request.

The IRS typically files a Notice of Federal Tax Lien (which becomes public record and may affect credit). Collection activities like levies are usually suspended as long as payments are made. The agreement includes ongoing obligations: stay current on all future tax filings and payments (including estimated taxes), make monthly payments on time, and submit to financial reviews every two years (or sooner if triggers like higher AGI appear on returns). The IRS may adjust payments upward if your situation improves significantly.

Every two years (or upon filing returns showing potential changes), the IRS reviews your financials to confirm continued hardship. If income or assets increase substantially, payments may rise, the agreement could convert to full-pay, or full payment could be demanded. Defaulting (missing payments, new delinquencies) can lead to termination, resumption of enforcement (levies, seizures), and loss of any protection. Direct debit is often recommended to avoid default.

User fees are the same as for other long-term installment agreements: typically $31 for online/direct debit setup, up to $225 for other methods. Low-income taxpayers (based on IRS poverty guidelines) may qualify for reduced fees, waivers, or reimbursements. The fee is non-refundable, even if the PPIA is later modified or terminated.

A PPIA can provide meaningful relief when full payment isn't realistic and an Offer in Compromise isn't viable (e.g., due to higher assets or income). However, it involves more scrutiny, potential liens, and future reviews than streamlined plans. We always evaluate all options first—such as full-pay agreements, Currently Not Collectible status, penalty abatement, or OIC—to find the least burdensome path. If a PPIA fits your situation, we can prepare the detailed submission and negotiate the most favorable terms possible. Contact us for a confidential review of your finances and tax account—we're here to help guide you through this effectively.

The IRS calculates the taxpayer’s Reasonable Collection Potential (RCP)—net equity in assets plus future disposable monthly income (after allowable expenses) multiplied by an applicable number of months. The offer must generally equal or exceed this RCP.

The IRS usually suspends most collection activity (levies, garnishments) while the offer is under review, though interest and penalties continue to accrue. Additional information may be requested, and the process typically takes several months to over a year.

The taxpayer must file all future returns and pay taxes on time for five years (except for Doubt as to Liability offers). The IRS will retain any refunds during this period, and any federal tax lien remains until full compliance with the terms.

Clients receive a written explanation of the rejection. An appeal can be filed within 30 days using Form 13711 to the IRS Independent Office of Appeals. If not appealed, the offer can often be revised and resubmitted (though fees and payments are generally not refunded).

Rejections commonly stem from unfiled returns, open bankruptcy, an offer below RCP without sufficient justification, incomplete or inaccurate financial information, disallowed expenses, or failure to meet basic eligibility criteria.

The timeline varies widely but often ranges from 6 to 12 months or longer, depending on case complexity, IRS workload, and responsiveness to information requests. In rare cases where no decision is reached within two years (excluding appeals), the offer may be deemed accepted.

Yes. The offer can be withdrawn at any time before acceptance by sending written notification to the IRS. Withdrawing ends the review process, but any payments already submitted are applied to the tax debt.

The IRS retains any overpayments or refunds (including interest) from the date of acceptance through the end of the calendar year in which acceptance occurs, applying them toward the remaining liability.

While it is possible to prepare and submit an OIC without assistance, the process is detailed and mistakes frequently lead to rejection. Working with an experienced tax attorney or enrolled agent significantly improves the chances of a successful outcome.

1. Start by reviewing the current Form 656-B Booklet for complete instructions, run the Pre-Qualifier Tool, and confirm all filings and deposits are current. Explore all other resolution options first. If the debt feels overwhelming, contact us for a confidential consultation—we can evaluate your specific situation and guide you through the process toward the best possible resolution.