The IRS must accept a "guaranteed" installment agreement for an individual if, among other conditions, the tax owed (not counting penalties and interest) is:

$10,000 or less, the taxpayer can pay within 3 years, and has filed and paid timely with no installment agreement in the prior 5 years

$25,000 or less, payable in 6 years

An individual with an assessed balance of $45,000 can generally get a streamlined installment agreement without a financial statement if the balance will be paid within:

72 months (or the collection statute date, if earlier)

How does an installment agreement affect the failure-to-pay penalty for an individual who filed on time?

The penalty rate drops to 0.25% per month while the agreement is in effect

The penalty doubles to 1% per month for as long as the agreement is in effect

While an installment agreement request is pending, may the IRS levy?

No; levy is prohibited while the request is pending, while the agreement is in effect, for 30 days after rejection or termination, and during a timely appeal

What is a partial payment installment agreement (PPIA)?

An agreement where the monthly payments will not fully pay the liability before the collection statute expires, requiring full financial disclosure and periodic review

An agreement paying half up front

An agreement for businesses only

A taxpayer can pay her balance within 180 days. What option is available?

A short-term payment plan of up to 180 days, with no setup fee (penalties and interest continue)

Currently not collectible status for up to 180 days, with penalties and interest suspended during that time

What can cause the IRS to default an installment agreement?

Missing a payment, failing to file a return or pay a new tax when due, or failing to provide requested financial information

How can a taxpayer appeal the IRS's proposed termination or rejection of an installment agreement?

Through the Collection Appeals Program, using Form 9423

A Tax Court petition filed within 30 days of the termination notice

Which statement about an in-business trust fund express installment agreement is correct?

It is available to businesses owing $25,000 or less that can pay within 24 months (or before the CSED), without a financial statement

It is available only to sole proprietors owing $25,000 or less who can pay within 24 months, and it requires a Form 433-B financial statement

It requires a Form 433-B in all cases

Installment agreements

Q: How much can I owe and still get an IRS payment plan without financial disclosure?

Individuals owing $50,000 or less can generally get a streamlined agreement paid within 72 months.

Q: Does an installment agreement stop penalties?

No, but for timely filers the failure-to-pay penalty drops from 0.5% to 0.25% a month; interest continues.

Taxpayers who cannot pay in full can request a monthly installment agreement on Form 9465 or online; the IRS must accept a guaranteed agreement for individuals owing $10,000 or less who can pay in 3 years, and generally approves streamlined agreements for balances up to $50,000 paid within 72 months without a financial statement.

Updated 2026-09-23 · 4 sources · By the EnrolledAgentKit team

Exam part

Part 3

Representation, Practices and Procedures

IRS domain

Specific Areas of Representation

20 of 85 scored Qs

Tax year tested

2025

2026-27 SEE

Practice questions

10 free below

The rules the exam tests

Figures for tax year 2025, the year the 2026-27 SEE tests. Verify against the cited primary source.
Rule	What it says (2025)	Source
Request	Form 9465 or Online Payment Agreement	IRS
Guaranteed IA	Tax <= $10,000; full pay in 3 years; clean 5-year history	IRC 6159(c)
Streamlined IA (individuals)	Assessed balance <= $50,000; up to 72 months (or CSED)	IRS
Short-term plan	Up to 180 days	IRS
In-business trust fund express	Businesses <= $25,000; 24 months	IRM 5.14
PPIA	Payments will not full-pay before CSED; financial statement required	IRC 6159(a)
Failure-to-pay penalty during IA	0.25% per month (timely filers)	IRC 6651(h)
Levy	Barred while request pending, IA in effect, 30 days after rejection/termination, during appeal	IRC 6331(k)(2)
Appeals	CAP (Form 9423) for rejection, modification or termination	IRS
Extension of time to pay	Form 1127 for undue hardship (usually up to 6 months)	IRC 6161

Worked example

Facts: Individual owes $42,000 (tax, penalties and interest), all returns filed.

Options: Streamlined IA: $42,000 / 72 = about $584 a month plus accruing interest, no Form 433-F needed. If she can pay in 5 months, a short-term plan avoids a setup fee. While the IA is in effect, the failure-to-pay penalty drops to 0.25% a month.

Exam traps

Guaranteed IA uses the tax amount; streamlined uses the assessed balance.
Interest continues on every plan.
CAP decisions cannot be taken to court.
A new unpaid balance can default the agreement.