The IRS will always want the liability to be paid off before the Collection Statute Expiration Date (CSED). If the CSED is near, the monthly payments needed to pay the liability may be higher than the taxpayer can afford. Partial installment agreements are now authorized.1 This is appropriate when the taxpayer can afford to make a monthly payment, but the amount will not pay off the entire liability before the CSED. Taxpayers who request partial installment agreements will have to show that they cannot pay more each month after paying basic expenses and that they do not have any assets that can be liquidated to pay off the entire liability. If the partial installment agreement is accepted, the taxpayer will make the required payments until the CSED at which point the liability will be extinguished. The advantage of a partial installment agreement is that the IRS will not take other collection actions while the monthly payments are being made.
- 1I.R.C. § 6159; I.R.M. 5.14.2.1.