Fresh Start Tax 1-866-700-1040 A Professional Tax Firm “A” Rated Company BBB
If the IRS Revenue Officer rejects your payment agreement, take it the IR.
The “Independent Administrative Reviewer” reviews the decision to reject installment agreement requests independent of employees’ and managers’ opinions. The reviewer must exercise independent judgement to determine if rejection of the installment agreement request is appropriate. The reviewer should use problem solving and negotiation techniques and consider the taxpayer’s perspective when working toward case resolution.
In accordance with Internal Revenue Code sections 6159(f) and 7122(e) taxpayers are entitled to independent administrative reviews of rejected requests for installment agreements. Contact employees (including revenue officers) and managers must ensure that all actions relative to this review are documented in case histories, including:
1. the date the case is sent to the independent reviewer;
2. the date the case is received from the independent reviewer; and
3. the date the case is forwarded for second level review (if applicable).
A side note to be aware of: Independent administrative review is not required in cases in which the installment agreement request is not identified as “pending” due to noncompliance with filing requirements. You must be current.
If the IRS is planning to reject a request for an installment agreement they are to notify taxpayers that rejection of the request is being recommended if that is the next planned action, but do not notify taxpayers of actual rejection of the installment agreement request until after independent administrative review.
Managers must review and concur with plans to reject installment agreement requests prior to independent administrative review.
If managers request additional information or action, these should be requested of the taxpayer or gained from the appropriate source, without commenting to the taxpayer regarding approval status of the agreement other than that the request is being considered. In addition to exercising care with regard to conveying rejection of requests, exercise care regarding conveying acceptances. Specifically, though the plan to accept an installment agreement request can be shared, do not convey acceptance if a request requires managerial approval until approval is obtained.
If rejection is the next planned action, the installment agreement case file will be sent to the Independent Administrative Reviewer along with:
Form 12233, “Independent Review PRIOR to Rejection of Request of Installment Agreement” ;
A statement regarding the reason(s) for the proposed rejection. Bear in mind that the basis for the rejection of an installment agreement request could be the subject of an immediate appeal or a future Collection Due Process hearing;
any documentation submitted by the taxpayer in connection with the installment agreement request;
Installment agreements are not considered “pending” if taxpayers are not in compliance with filing requirements (See IRM 5.14.1.4.1), and therefore they do not require Independent Administrative review.
In deciding to uphold or overturn a proposed rejection, reviewers should:
Consider the case as a whole;
Focus on the reasons for the proposed rejection given by the contact employee (or, if appropriate, the reasons for the proposed rejection given by the group manager);
Determine whether the proposed installment agreement would fully pay the liability before the CSED
Review the analysis of the taxpayer’s financial condition to determine whether the payment amount requested by the taxpayer is adequate, given the taxpayer’s ability to pay;
Determine whether the taxpayer is in compliance with the filing requirements
Determine whether positions expressed by the taxpayer were considered in the interview or review process; and
Determine if reasons for rejection provided by the revenue officer or his/her manager should be provided to the taxpayer. Considering that the basis for the rejection can be the subject of an immediate appeal or a future Collection Due Process hearing, there should be very few circumstances when the taxpayer should not be told of the reasons for rejection. The reviewer should ensure that the reasons for rejection are well documented in the file including, as necessary, why a partial payment installment agreement was not appropriate.
The reviewer may:
Recommend that taxpayers be granted installment agreements (of the same amount proposed by taxpayers, or a different amount).
Concur with decisions to reject agreement requests;
Suggest modifications or conditions to agreements;
Request additional documentation from revenue officers or other contact employees; and/or
Request revenue officers or other contact employees gain additional information or documentation from taxpayers.
Reviewers will provide all reasons for concurring (or not concurring) with decisions to reject installment agreement requests in the remarks section of Form 12233, Independent Review Form. Bear in mind that the basis for the rejection of an installment agreement request could be the subject of an immediate appeal or a future Collection Due Process hearing.
Reviewers must sign and record the date that cases were reviewed on the review form. The reviewer’s original signature must be on Form 12233 and any attachment thereto. IAR reviews will be completed and a determination made no later than 15 business days from opening the ICS OI.
If a case is returned to a revenue officer (or other contact employee), the revenue officer or other contact employee will take the actions directed by the reviewer. If reviewers recommend acceptance of agreements, this information should be relayed to taxpayers, and agreements should be processed.
Exception:
If, after reviewing the reviewer’s report a revenue officer still believes rejection is the proper action, the case file will be resubmitted to the reviewer, along with additional information and an explanation that supports rejection of the installment agreement request. If no resolution can be reached, the decision will be elevated to second level management (Territory Manager).
If a decision to reject an installment agreement request is sustained by the Independent Reviewer:
rejection and, except in rare cases, the basis for rejection must be communicated to the taxpayer by issuing Letter 4052 “Rejection of Proposed Installment Agreement” found on the ICS Installment Agreement Template menu;
specific amounts and conditions for acceptance of the agreement request must be provided to the taxpayer when they are informed of the rejection decision, if sufficient information has been provided to make this determination and an installment agreement is an appropriate resolution;
If the taxpayer later proposes an amount less than what previously was communicated to the taxpayer as being acceptable, this proposal will be deemed as an installment agreement request to delay collection, not requiring another independent review, unless there has been a change in the taxpayer’s circumstances. Approval by the group manager is required
taxpayers must be provided the right to appeal decisions to reject installment agreement requests (See IRM 5.14.9.8); and
If the taxpayer requests an appeal, note all applicable information on Form 12233, including the date of issuance of Form 9423 “Collection Appeal Request” to the taxpayer, the date of receipt of completed Form 9423 “Collection Appeal Request” from the taxpayer, and the date the file was forwarded to Appeals.
If levy is the next intended action, then Letter 1058(DO) or 3174P may be issued to taxpayers at the same time that the rejection of pending installment agreements is communicated to taxpayers using the Letter 4052. See IRM 5.11.1.2.2.2 and IRM 5.11.1.2.2.6 regarding the appropriate letter to use. See IRM 5.7.8.3(6) for exceptions to levy being the next intended action.
Note:
No levy may be issued until after 45 days have passed since the communication of rejection of the request for installment agreement to the taxpayer.
In the event a proposed installment agreement is rejected and it is determined that the taxpayer made a good faith revision of the proposal and submitted the revision within 30 days of the date of the rejection, the installment agreement must be considered anew. If the revised submission is not in good faith, the appeal period continues to run from the date of the original rejection.
Independent reviewers will notify referring contact employees or functions through appropriate channels of the outcomes of reviews, so appropriate TC 971s may be input. (See Exhibit 5.14.1–1.)
If taxpayers propose installment agreements as a collection alternative after requesting a Collection Due Process hearing (CDP) and rejection is planned, then the field employee will forward the CDP periods to Appeals under Collection Due Process (See IRM 5.1.9.3). The independent review for CDP periods is accomplished by approval and signing of Form 5402 (Appeals Case Memorandum cover sheet) by the Appeals Team Manager. This is also true if installment agreements are requested while cases are assigned to Appeals for other reasons. If there are periods in the installment agreement request that are not included in the CDP request, these periods will be sent for independent review by Technical Services in accordance with the procedures provided in IRM 5.14.9.7(14).
