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T.D. 9473 by ProQuest


T.D. 9473, under Section 6159, relates to the payment of tax liabilities in installments and reflects changes to the law made by the Taxpayer Bill of Rights II, the Internal Revenue Service Restructuring and Reform Act of 1998, and the American Jobs Creation Act of 2004.

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									Section 6159.—Agree-                         1457 (1996)). Taxpayers may appeal              Summary of Comments and
ments for Payment of Tax                     rejections of proposed installment agree-       Explanation of Revisions
Liability in Installments                    ments under section 7122(e), added to the
                                             Code by section 3462 of Internal Revenue           The final regulations adopt certain
26 CFR 1.301.6159–0: Table of contents.      Service Restructuring and Reform Act of         recommendations contained in the com-
                                             1998 (RRA 98), Public Law 105–206 (112          ments by clarifying two provisions of
T.D. 9473                                    Stat. 685, 764 (1998)). Section 6159(c),        the proposed regulations. As explained
                                             added to the Code by section 3467 of RRA        in this preamble, §301.6159–1(e)(3) was
DEPARTMENT OF THE                            1998, requires the IRS to accept a pro-         amended to clarify that the taxpayer may
                                             posed installment agreement for income          submit a request to modify or termi-
TREASURY                                                                                     nate the installment agreement. Section
                                             taxes under certain circumstances. Sec-
Internal Revenue Service                                                                     301.6159–1(e)(3) further clarifies that
                                             tion 3506 of RRA 1998 requires the IRS
26 CFR Part 301                              to send each taxpayer with an installment       such a request will not suspend the statute
                                             agreement an annual statement showing           of limitations on collection and the tax-
Agreements for Payment of                    the balance due at the beginning of the         payer must comply with the existing
Tax Liability in Installments                year, the payments made during the year,        installment agreement while the request
                                             and the remaining balance due at the end        is being considered. As also explained
AGENCY: Internal Revenue Service             of the year.                                    in this preamble, §301.6159–1(e)(1)(i)
(IRS), Treasury.                                 Section 843 of the American Jobs Cre-       clarifies that the IRS may terminate an
                                             ation Act of 2004 (AJCA), Public Law            installment agreement if the taxpayer pro-
ACTION: Final Regulations.                   108–357 (118 Stat. 1418, 1600 (2004)),          vides materially incomplete or inaccurate
                                             amended section 6159(a) to allow the IRS        information in response to an IRS request
SUMMARY: This document contains fi-          to enter into installment agreements that       for a financial update.
nal regulations relating to the payment of   provide for partial (as well as full) pay-         The following is a section-by-section
tax liabilities in installments. The regu-   ment of a tax liability, but excludes partial   analysis of the comments.
lations reflect changes to the law made      payment installment agreements from the
by the Taxpayer Bill of Rights II, the In-                                                   Section 301.6159–1(b): Procedures for
                                             scope of installment agreements that must
ternal Revenue Service Restructuring and                                                     submission and consideration of proposed
                                             be accepted by the IRS. Section 843 of the
Reform Act of 1998, and the American                                                         installment agreements.
                                             AJCA also added new section 6159(d), re-
Jobs Creation Act of 2004. The regula-       quiring the IRS to review partial payment          Section 301.6159–1(b) of the proposed
tions will affect taxpayers submitting in-   installment agreements every two years.         regulations provided that an installment
stallment agreements to the IRS.             The primary purpose of the review is to         agreement request must be submitted ac-
                                             determine whether the financial condition       cording to procedures prescribed by the
DATES: Effective Date: These regulations     of the taxpayer has significantly changed
are effective on November 25, 2009.                                                          IRS. It did not require the IRS to accept
                                             so as to warrant an increase in the value       or reject the request within a specific time
   Applicability Date: For the date of ap-   of the payments being made. See H. Rep.
plicability, see §301.6159(k).                                                               frame. The commenter proposed to limit
                                             No. 108–755, 108th Cong., 2d Sess., 2005        the IRS’s time to consider an installment
                                             U.S.C.C.A.N. 1341 (October 7, 2004).            agreement to 90 days; if the IRS fails to
                                                 On March 5, 2007, a notice of proposed      act in that time, the agreement would be
CONTACT: Walter Ryan, (202) 622–3620
                                             rulemaking (REG–100841–97, 2007–1               granted automatically. The commenter
(not a toll-free number).
                                             C.B. 763 [72 FR 9712]) was published            reasoned that the limited time frame would
                                             in the Federal Register. The proposed           benefit the IRS because more installments
                                             regulations reflected the changes made          agreements would be automatically al-
Background                                   to section 6159 by the Taxpayer Bill of         lowed, thereby increasing revenues, and
                                             Rights II, the RRA 98, and the AJCA. The        would benefit the taxpayer by allowing
    This document contains amendments        proposed regulations reflected current IRS      payments to begin quickly and efficiently.
to the Procedure and Administration Reg-     administrative practice. The IRS received       The recommendation was not adopted
ulations (26 CFR part 301) under section     one set of written comments with numer-         for two reasons. First, the IRS already
6159 of the Internal Revenue Code (Code).    ous recommendations. No public hearing          grants installment agreements quickly
Section 6159 allows the IRS to enter into    was requested or held. After consideration      and automatically in the vast majority
agreements for the payment of any unpaid     of the comments, the proposed regulations       of cases. If the taxpayer owes 
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