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Partial Pay Installment Agreement (PPIA)

A Partial Payment Installment Agreement (PPIA) is similar to a regular Full Pay Installment Agreement, where you make monthly payments to the IRS for taxes owed. However, the amount you pay monthly may not be the amount to pay off the liability in full over the course of 72 months.  The IRS typically does not agree to someone paying less than what they owe unless they prove that they cannot afford to pay the full amount.  To show the IRS that you may qualify for a Partial Pay Installment Agreement (PPIA), you must submit a full financial disclosure (aka Personal Financial Statements) – which is form 433-A, including details about your income, expenses, assets, and liabilities.
Your monthly payment is determined by a Collection Information Statement, which is form 433-A for individuals, and form 433-B for businesses. This form tells the IRS how much or what your ability to pay should be. However, this does not mean that the IRS will take your word for face value as you may have to substantiate the information on this form.  Here are some requirements to consider for a Partial Payment Installment Agreement PPIA)

  • You have a liability with the IRS, but you cannot afford to pay it in full by the expiration date of the liability – called the Collection Statute Expiration Date (CSED)
  • You owe over $10,000 in tax debt, penalties, and interest
  • You are compliant, meaning you have filed all past tax returns
  • You are not currently in active bankruptcy proceeding
  • You have not had an Offer in Compromise accepted
  • You have no assets to liquidate to pay off the liability