Partial Payment Installment Agreement (PPIA) for California Client
Taxpayers who find themselves owing the IRS thousands or millions of dollars without the ability to cut a check for the whole enchilada, often look to secure an Installment Agreement (IA). This is widely accepted as the IRS’ most practical way to resolve a large, delinquent tax liability. The IRS may also consider an Offer in Compromise (OIC) or Currently Not Collectible (CNC) status as a resolution, but these are much more difficult to attain.
Offer in Compromise or Installment Agreement?
The American Jobs Creation Act of 2004 amended Internal Revenue Code § 6159 to provide for the Partial Payment Installment Agreement (PPIA), which is a mix of the IRS’ standard IA and the OIC. It allows a taxpayer to pay back less than what is owed to the IRS by making a low monthly payment for the remainder of the collection statute, generally ten years from the date of assessment. Unlike the OIC, the PPIA can often maneuver around equity in assets.
There are possible drawbacks to the PPIA when compared to the OIC, however. There is a review of financial information every two years to determine if the monthly payment amount should change, and the tax lien will remain in place for the life of the collection statute. But in general, the PPIA is a win-win situation for both the IRS and for taxpayers. The IRS stands to decrease the Tax Gap by collecting more delinquent tax, while spending less money to do it. The OIC review process eats up a lot of resources, when compared to the PPIA. And taxpayers have a practical option to satisfy their back tax debt.
At M&M, we’ve been successful in negotiating hundreds of formal IRS Installment Agreements, many of them PPIAs, for years. This PPIA was secured for a California client, a small business in Azusa. As responsible practitioners, M&M’s tax resolution experts are constantly looking to see if clients qualify for the PPIA.
M&M Financial specializes in resolving business and personal tax liabilities stemming from delinquent 941 payroll tax. We have perfected a unique tax resolution system that allows us to work within the strict guidelines set by the IRS and State taxing authorities, ensuring the best possible results for our clients. Contact us here or call us at 866-487-5624 to find out how M&M’s Tax Resolution System can help you.