| The IRS
implemented an additional payment
option, on January 17, 2005, known as
the Partial Payment Installment
Agreement (PPIA) for taxpayers who have
outstanding federal tax liabilities.
This new payment option became possible
with the passage of the American Jobs
Creation Act of 2004 signed into law on
October 22, 2004. The new legislation
includes language amending Internal
Revenue Code 6159 to allow the IRS to
enter into installment agreements that
result in full or partial payment of the
tax liability.
Prior to
enactment of this legislation, taxpayers
that could not fully pay their
outstanding tax liabilities could only
enter into an agreement with the IRS if
it resulted in full payment of the
liability. This left taxpayers unable
to meet this criterion with limited
payment options.
Taxpayers
who request a PPIA must provide complete
and accurate financial information that
will be reviewed and verified.
Taxpayers will also be required to
address equity in assets that can be
utilized to reduce or fully pay the
amount of the outstanding liability.
In
addition, taxpayers granted PPIAs will
be subject to a subsequent financial
review every two years. As a result of
this review, the amount of the
installment payments could increase or
the agreement could be terminated, if
the taxpayer’s financial condition
improves.
The PPIA
payment option will provide an
appropriate payment option for many
taxpayers. Those who qualify for the
PPIA option will be strongly encouraged
to make their payments via the direct
debit option. |
