A conditional installment agreement (CIA) is a six-year payment agreement. This IRS payment plan considers the taxpayer’s financial situation when establishing the agreement.
Taxpayers applying for a CIA must provide financial information. They list all assets, including their home, cars, bank accounts, income, and expenses.
Unlike other installment agreements, taxpayers do not need to provide proof of their expenses for a conditional installment agreement. All the taxpayer’s household expenses are allowed by meeting specific conditions.
To qualify for a conditional installment agreement, taxpayers must meet the following criteria:
- Prove the ability to stay current with all bills and filing requirements.
- You can completely pay off your tax liability within six years and before the Collection Statute Expiration Date (CSED).
- Ensure that the claimed expense amounts are reasonable.
Usually, the IRS allows only a maximum dollar amount of expenses based on allowable expenses for each expense type. Some of these expenses, for example, would include housing expenses and car payments. If a taxpayer owes over $50,000 but can pay the entire balance within six years, the IRS allows expenses over the standard amounts. These expenses are only allowed in a conditional installment agreement program.
It’s important to note that tax laws and IRS policies change over time. Advocate Tax Solutions recommends consulting with a tax professional or the IRS directly. Having the most up-to-date information and guidance on CIA’s and tax payment options is essential.considers
