What different types of Installment Agreements are there?

An Installment Agreement is an agreement with the IRS in which you agree to pay them a certain amount per month to settle the amount of debt that you owe them.

There are two types of Installment Agreements.

The first type is what’s known as a Full Pay Installment Agreement, which is based upon the amount of debt that you owe and the amount that you’re going to pay them on a monthly basis as determined by completing the form 433-A Collection Information Form.

Based upon those numbers, a full pay Installment Agreement means that you’re going to pay the Full amount that is due to the IRS within what’s known as the statute of limitations.

The statute of limitations means how long does the statute extend for.

The statute of limitations is effectively 10 years from the date of assessment, whenever the tax is assessed.

So a full pay Installment Agreement means that you’re going to fully pay the Installment Agreement, (everything that you owe) the IRS during the remaining statute of limitations.

The other type of Installment Agreement is known as a Partial Pay Installment Agreement, which is based upon the amount that the IRS has agreed to accept from you on a monthly basis based upon your collection information form.

You’re going to pay that amount but you’re only going to pay it out over the remaining statute of the tax year in question, understanding that the IRS only has 10 years to collect on a particular debt from the date of assessment.

So where you are, within that 10-year period of statute is going to determine how long you’re going to be required to pay on the Installment Agreement.

Generally speaking, the IRS is going to determine the amount and if it turns out the amount is too low to pay off the debt in full within the specified period of time remaining on the statute, then you’re not going to pay the debt in full.

After 10 years, the debt will be written off and you’ll no longer be responsible for it.