What Is a Non-Streamlined Installment Agreement?
The COVID shutdown prompted a variety of distressing IRS issues, but high-debt taxpayers managed to find a small silver lining in all this chaos: gentler payment plans with terms far easier than that available pre-COVID.
Commonly referred to as the non-streamlined installment agreement (NSIA), this revised system brings many of the benefits of the streamlined installment agreement (available to low-debt taxpayers) to those with higher levels of debt. If it seems too good to be true, however, keep in mind: this solution can be accompanied by some significant downsides, as we discuss below.
How Does the Non-Streamlined Installment Agreement Work?
Taxpayers with IRS debts of up to $250,000 can qualify for the non-streamlined installment agreement. Like streamlined installment agreements, this means paying off debt gradually over time.
Those approved for NSIAs can usually avoid financial disclosures, as long as they manage to pay the amount owed by the time the collection statute of limitations arrives.
Another advantage of the NSIA? There’s no need to liquidate assets to ensure that the full tax debt is paid in time for the statute of limitations. Instead, eligible taxpayers are permitted to set up direct deposit payments with the IRS.
What’s the Catch?
There is one major downside to the non-streamlined installment agreement: a Notice of Federal Tax Lien will need to be filed. This is a huge catch and one that may give those otherwise interested in the NSIA pause.
One option for avoiding this? Paying down the balance until it reaches $50,000 — and then setting up a streamlined installment agreement.
Another downside? NSIAs cannot be obtained online. Rather, agreements must be set up over the phone or in writing. Better yet: working with a tax expert to ensure the best terms possible for your installment plan.
Not sure if the non-streamlined installment approach is appropriate for your situation? Helpful insight is available when you work with the Highland Tax Group. Reach out for guidance on IRS installments and other potential solutions.