Internal Revenue Code:Sec. 6159. Agreements for payment of tax liability in installments

From TaxAlmanac

Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle F - Procedure and Administration
       CHAPTER 62 - TIME AND PLACE FOR PAYING TAX
        Subchapter A - Place and Due Date for Payment of Tax
      

Statute

    Sec. 6159. Agreements for payment of tax liability in installments
 
    (a) Authorization of agreements
      The Secretary is authorized to enter into written agreements with
    any taxpayer under which such taxpayer is allowed to make payment
    on any tax in installment payments if the Secretary determines that
    such agreement will facilitate full or partial collection of such
    liability.
    (b) Extent to which agreements remain in effect
      (1) In general
        Except as otherwise provided in this subsection, any agreement
      entered into by the Secretary under subsection (a) shall remain
      in effect for the term of the agreement.
      (2) Inadequate information or jeopardy
        The Secretary may terminate any agreement entered into by the
      Secretary under subsection (a) if -
          (A) information which the taxpayer provided to the Secretary
        prior to the date such agreement was entered into was
        inaccurate or incomplete, or
          (B) the Secretary believes that collection of any tax to
        which an agreement under this section relates is in jeopardy.
      (3) Subsequent change in financial conditions
        If the Secretary makes a determination that the financial
      condition of a taxpayer with whom the Secretary has entered into
      an agreement under subsection (a) has significantly changed, the
      Secretary may alter, modify, or terminate such agreement.
      (4) Failure to pay an installment or any other tax liability when
          due or to provide requested financial information
        The Secretary may alter, modify, or terminate an agreement
      entered into by the Secretary under subsection (a) in the case of
      the failure of the taxpayer -
          (A) to pay any installment at the time such installment
        payment is due under such agreement,
          (B) to pay any other tax liability at the time such liability
        is due, or
          (C) to provide a financial condition update as requested by
        the Secretary.
      (5) Notice requirements
        The Secretary may not take any action under paragraph (2), (3),
      or (4) unless -
          (A) a notice of such action is provided to the taxpayer not
        later than the day 30 days before the date of such action, and
          (B) such notice includes an explanation why the Secretary
        intends to take such action.
      The preceding sentence shall not apply in any case in which the
      Secretary believes that collection of any tax to which an
      agreement under this section relates is in jeopardy.
    (c) Secretary required to enter into installment agreements in
        certain cases
      In the case of a liability for tax of an individual under
    subtitle A, the Secretary shall enter into an agreement to accept
    the full payment of such tax in installments if, as of the date the
    individual offers to enter into the agreement -
        (1) the aggregate amount of such liability (determined without
      regard to interest, penalties, additions to the tax, and
      additional amounts) does not exceed $10,000;
        (2) the taxpayer (and, if such liability relates to a joint
      return, the taxpayer's spouse) has not, during any of the
      preceding 5 taxable years -
          (A) failed to file any return of tax imposed by subtitle A;
          (B) failed to pay any tax required to be shown on any such
        return; or
          (C) entered into an installment agreement under this section
        for payment of any tax imposed by subtitle A,
        (3) the Secretary determines that the taxpayer is financially
      unable to pay such liability in full when due (and the taxpayer
      submits such information as the Secretary may require to make
      such determination);
        (4) the agreement requires full payment of such liability
      within 3 years; and
        (5) the taxpayer agrees to comply with the provisions of this
      title for the period such agreement is in effect.
    (d) Secretary Required To Review Installment Agreements for 
      Partial Collection Every Two Years.--In the case of an agreement
      entered into by the Secretary under subsection (a) for partial
      collection of a tax liability, the Secretary shall review the
      agreement at least once every 2 years.
    (e) Administrative review
      The Secretary shall establish procedures for an independent
    administrative review of terminations of installment agreements
    under this section for taxpayers who request such a review.
    (f) Cross reference
          For rights to administrative review and appeal, see section
        7122(e).
 

Sources

    (Added Pub. L. 100-647, title VI, Sec. 6234(a), Nov. 10, 1988, 102
    Stat. 3735; amended Pub. L. 104-168, title II, Sec. 201(a), (b),
    202(a), July 30, 1996, 110 Stat. 1456, 1457; Pub. L. 105-206, title
    III, Sec. 3462(c)(2), 3467(a), July 22, 1998, 112 Stat. 766, 769;
    Pub. L. 105-277, div.  J, title IV, Sec. 4002(g), Oct. 21, 1998,
    112 Stat. 2681-907.)
 

Miscellaneous

                                 AMENDMENTS

    2006 - P.L. 109-222
    SEC. 509. PARTIAL PAYMENTS REQUIRED WITH SUBMISSION OF OFFERS-IN-
            COMPROMISE.
    (c) Conforming Amendment.--Section 6159(f) is amended by striking 
    ``section 7122(d)'' and inserting ``section 7122(e)''.
    (d) Effective Date.--The <<NOTE: 26 USC 6159 note.>> amendments made 
    by this section shall apply to offers-in-compromise submitted on and 
    after the date which is 60 days after the date of the enactment of this 
    Act.
  
      2004 - Subsec.843(a),Pub.L.108-357, amended Sec.6159 as follows:
    (1) Section 6159(a) (relating to authorization of 
        agreements) is amended--
          (A) by striking ``satisfy liability for payment of'' 
                and inserting ``make payment on'', and
          (B) by inserting ``full or partial'' after 
                ``facilitate''.
    (2) Section 6159(c) (relating to Secretary required to enter 
        into installment agreements in certain cases) is amended in the 
        matter preceding paragraph (1) by inserting ``full'' before 
        ``payment''.
    (3) Section 6159 is amended by redesignating subsections (d) and
       (e) as subsections (e) and (f), respectively, and inserting
        after subsection (c) the following new subsection:
       ``(d) Secretary Required To Review Installment Agreements for 
            Partial Collection Every Two Years.
      1998 - Subsec. (c). Pub. L. 105-206, Sec. 3467(a), added subsec.
    (c). Former subsec. (c) redesignated (d).
      Subsec. (d). Pub. L. 105-277 redesignated subsec. (d), relating
    to cross reference, as (e).
      Pub. L. 105-206, Sec. 3467(a), redesignated former subsec. (c),
    relating to administrative review, as (d).
      Pub. L. 105-206, Sec. 3462(c)(2), added subsec. (d), relating to
    cross reference.
      Subsec. (e). Pub. L. 105-277 redesignated subsec. (d), relating
    to cross reference, as (e).
      1996 - Subsec. (b)(3). Pub. L. 104-168, Sec. 201(b), amended par.
    (3) generally.  Prior to amendment, par. (3) read as follows:
      ''(A) In general. - If the Secretary makes a determination that
    the financial condition of a taxpayer with whom the Secretary has
    entered into an agreement under subsection (a) has significantly
    changed, the Secretary may alter, modify, or terminate such
    agreement.
      ''(B) Notice. - Action may be taken by the Secretary under
    subparagraph (A) only if -
        ''(i) notice of such determination is provided to the taxpayer
      no later than 30 days prior to the date of such action, and
        ''(ii) such notice includes the reasons why the Secretary
      believes a significant change in the financial condition of the
      taxpayer has occurred.''
      Subsec. (b)(5). Pub. L. 104-168, Sec. 201(a), added par. (5).
      Subsec. (c). Pub. L. 104-168, Sec. 202(a), added subsec. (c).
                     
                     EFFECTIVE DATE OF 2006 AMENDMENT
    (d) Effective Date.--The <<NOTE: 26 USC 6159 note.>> amendments made 
    by this section shall apply to offers-in-compromise submitted on and 
    after the date which is 60 days after the date of the enactment of this 
    Act.
   
                     EFFECTIVE DATE OF 2005 AMENDMENTS
      Amendment by S.A.F.E. Transportation Equity Act of 2005, Sec.
      5531, section shall apply to agreements entered into on or
      after the date which is 180 days after the date of the
      enactment of this Act. Sec. 5532 amendments to Sec. 6159(b)(4)
      shall apply to failures occurring on or after the date of the
      enactment of this Act.
                     EFFECTIVE DATE OF 2004 AMENDMENTS
      Amendment by Pub.L.108-357, Sec.843, amended Sec.6159;
    Effective Date.--The amendments made by this section shall apply to
    agreements entered into on or after the date of the enactment of
    this Act.
                     EFFECTIVE DATE OF 1998 AMENDMENTS
      Amendment by Pub. L. 105-277 effective as if included in the
    provision of the Internal Revenue Service Restructuring and Reform
    Act of 1998, Pub. L. 105-206, to which such amendment relates, see
    section 4002(k) of Pub. L. 105-277, set out as a note under section
    1 of this title.
      Amendment by section 3462(c)(2) of Pub. L. 105-206 applicable to
    proposed offers-in-compromise and installment agreements submitted
    after July 22, 1998, see section 3462(e)(1) of Pub. L. 105-206, set
    out as a note under section 6331 of this title.
      Pub. L. 105-206, title III, Sec. 3467(b), July 22, 1998, 112
    Stat. 770, provided that: ''The amendment made by this section
    (amending this section) shall take effect on the date of the
    enactment of this Act (July 22, 1998).''
                      EFFECTIVE DATE OF 1996 AMENDMENT
      Section 201(c) of Pub. L. 104-168 provided that: ''The amendments
    made by this section (amending this section) shall take effect on
    the date 6 months after the date of the enactment of this Act (July
    30, 1996).''
      Section 202(b) of Pub. L. 104-168 provided that: ''The amendment
    made by subsection (a) (amending this section) shall take effect on
    January 1, 1997.''
                               EFFECTIVE DATE
      Section 6234(c) of Pub. L. 100-647 provided that: ''The
    amendments made by this section (enacting this section and amending
    section 6601 of this title) shall apply to agreements entered into
    after the date of the enactment of this Act (Nov. 10, 1988).''
                STATEMENTS REGARDING INSTALLMENT AGREEMENTS
      Pub. L. 105-206, title III, Sec. 3506, July 22, 1998, 112 Stat.
    771, as amended by Pub. L. 106-554, Sec. 1(a)(7) (title III, Sec.
    302(a)), Dec. 21, 2000, 114 Stat. 2763, 2763A-632, provided that:
    ''The Secretary of the Treasury or the Secretary's delegate shall,
    beginning not later than September 1, 2001, provide each taxpayer
    who has an installment agreement in effect under section 6159 of
    the Internal Revenue Code of 1986 an annual statement setting forth
    the initial balance at the beginning of the year, the payments made
    during the year, and the remaining balance as of the end of the
    year.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 6323, 6330, 6331, 6343,
    6601, 6651, 7122 of this title.