In an earlier video, I went over what a tax installment plan was, but in this video, we’re going to go ahead and talk about streamline installment agreement.
A streamline installment agreement is used when a taxpayer owes $50,000 of less and actually full pay that obligation within 72 months. The IRS then breaks that up into equal monthly payments and it’s usually fairly simple to do.
This is usually done without actually providing any financial statement‑type information. It means you don’t have to do a 433F. You don’t have to do a 433A or B.
You simply offer the IRS to full pay the obligation within the 72 months ‑‑ your obligation of $50,000 or less.
Now, there’s an exciting tax installment plan development called, “The Fresh Start Initiative,” this new streamline amounts are part of that Fresh Start Initiative.
But the thing that I think is really the most interesting is there’s actually a provision for the withdraw of a federal tax lien if you get into a streamline installment agreement and you make it through your first three payments by direct debit.
What’s direct debit? Well, direct debit is a program by which the IRS automatically withdraws that installment agreement payment from your bank account.
Typically in the past I haven’t been a big fan of the direct debit program. The reason is, it didn’t work. The IRS would never take out the money and then it would default the installment agreement and then it was back on the taxpayer’s side to go ahead and reinstate the installment agreement. It just didn’t work that well, at all.
It seems like they got a lot of these kinks worked out. I think that this could be a really opportunity for people who have tax liens filed against them to get them withdrawn.
Again, streamline installment agreement under $50,000, payable within 72 months. If you go with the direct debit option and you make your first three payments in a row with no problems, then the IRS is supposed to automatically withdraw the Notice of Failure of Tax Lien filed against you.
This could be helpful because it could make it easier to sell your house, or buy a house, or improve your credit rating because when you get a notice of federal tax lien filed against you. It typically hits you about 50 points or more on your credit report.