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Internal Revenue Code, § 6159. Agreements For Payment Of Tax Liability In Installments

I.R.C. § 6159(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.
I.R.C. § 6159(b) Extent To Which Agreements Remain In Effect
I.R.C. § 6159(b)(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.
I.R.C. § 6159(b)(2) Inadequate Information Or Jeopardy
The Secretary may terminate any agreement entered into by the Secretary under subsection (a) if—
I.R.C. § 6159(b)(2)(A)
information which the taxpayer provided to the Secretary prior to the date such agreement was entered into was inaccurate or incomplete, or
I.R.C. § 6159(b)(2)(B)
the Secretary believes that collection of any tax to which an agreement under this section relates is in jeopardy.
I.R.C. § 6159(b)(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.
I.R.C. § 6159(b)(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—
I.R.C. § 6159(b)(4)(A)
to pay any installment at the time such installment payment is due under such agreement,
I.R.C. § 6159(b)(4)(B)
to pay any other tax liability at the time such liability is due, or
I.R.C. § 6159(b)(4)(C)
to provide a financial condition update as requested by the Secretary.
I.R.C. § 6159(b)(5) Notice Requirements
The Secretary may not take any action under paragraph (2), (3), or (4) unless—
I.R.C. § 6159(b)(5)(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
I.R.C. § 6159(b)(5)(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.
I.R.C. § 6159(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—
I.R.C. § 6159(c)(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;
I.R.C. § 6159(c)(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—
I.R.C. § 6159(c)(2)(A)
failed to file any return of tax imposed by subtitle A;
I.R.C. § 6159(c)(2)(B)
failed to pay any tax required to be shown on any such return; or
I.R.C. § 6159(c)(2)(C)
entered into an installment agreement under this section for payment of any tax imposed by subtitle A,
I.R.C. § 6159(c)(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);
I.R.C. § 6159(c)(4)
the agreement requires full payment of such liability within 3 years; and
I.R.C. § 6159(c)(5)
the taxpayer agrees to comply with the provisions of this title forthe period such agreement is in effect.
I.R.C. § 6159(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.
I.R.C. § 6159(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.
I.R.C. § 6159(f) Installment Agreement Fees
I.R.C. § 6159(f)(1) Limitation On Fee Amount
The amount of any fee imposed on an installment agreement under this section may not exceed the amount of such fee as in effect on the date of the enactment of this subsection.
I.R.C. § 6159(f)(2) Waiver Or Reimbursement
In the case of any taxpayer with an adjusted gross income, as determined for the most recent year for which such information is available, which does not exceed 250 percent of the applicable poverty level (as determined by the Secretary)—
I.R.C. § 6159(f)(2)(A)
if the taxpayer has agreed to make payments under the installment agreement by electronic payment through a debit instrument, no fee shall be imposed on an installment agreement under this section, and
I.R.C. § 6159(f)(2)(B)
if the taxpayer is unable to make payments under the installment agreement by electronic payment through a debit instrument, the Secretary shall, upon completion of the installment agreement, pay the taxpayer an amount equal to any such fees imposed.
I.R.C. § 6159(g) Cross Reference
For rights to administrative review and appeal, see section 7122(e).
(Added Pub. L. 100-647, title VI, 6234(a), Nov. 10, 1988, 102 Stat. 3735; amended Pub. L. 105-206, title III, Sec. 3462(c), 3467(a), July 22, 1998, 112 Stat 685; Pub. L. 105-277, title IV, Sec. 4002(g), Oct. 21, 1998, 112 Stat 2681; Pub. L. 108-357, title VIII, Sec. 843(a), (b), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-222, title V, Sec. 509(c), May 17, 2006, 120 Stat. 345; Pub. L. 115-123, Div. D, title II, Sec. 41105(a), Feb. 9, 2018, 132 Stat. 64.)
BACKGROUND NOTES
AMENDMENTS
2018 -Subsec. (f)-(g). Pub. L. 115-123, Sec. 41105(a), redesignated subsec. (f) as subsec. (g) and added a new subsec. (f).
2006 - Subsec. (f). Pub. L. 109-222, Sec. 509(c), amended subsec. (f) by substituting “section 7122(e)” for “section 7122(d)”.
2004 - Subsec. (a). Pub. L. 108-357, Sec. 843(a)(1)(A), substituted “make payment on” for “satisfy liability for payment of”.
Subsec. (a). Pub. L. 108-357, Sec. 843 (a)(1)(B), inserted “full or partial” after “facilitate”.
Subsec. (c). Pub. L. 108-357, Sec. 843(a)(2), added “full” before “payment” in the matter preceding par. (1).
Subsec. (d), (e). Pub. L. 108-357, Sec. 843(b), redesignated subsec. (d) as subsec. (e) and added a new subsec. (d).
1998 - Subsec. (d). Pub. L. 105-277, Sec. 4002(g), redesignated subsec. (d), as added by Pub. L. 105-206, as subsec. (e).
Subsec. (c). Pub. L. 105-206, Sec. 3467(a), redesignated subsec. (c) as subsec. (d) and added a new subsec. (c).
Subsec. (d)[e]. Pub. L. 105-206, Sec. 3462(c)(2), added subsec. (d). Note that Sec. 3467(a) of Pub. L. 105-206 also added a subsec. (d).
1996--Subsec. (b)(5). Pub. L. 104-168, 201(a), added par. (5).
Subsec. (b)(3). Pub. L. 104-168, 201(b), struck subparagraph (B).
Subsec. (c). Pub. L. 104-168, 202(a), added subsection (c).
1981--Pub. L. 97-34, title IV, 422(e)(5)(C), Aug. 13, 1981, 95 Stat. 316, substituted in item 6166 “Extension of time” for “Alternate extension of time” and struck out item 6166A “Extension of time for payment of estate tax where estate consists largely of interest in closely held business”.
1976--Pub. L. 94-455, title XIX, 1906(b)(4), title XX, 2004(f)(5), Oct. 4, 1976, 90 Stat. 1833, 1872, struck out item 6162 “Extension of time for payment of tax on gain attributable to liquidation of personal holding companies”, added item 6166, and renumbered former item 6166 as 6166A.
1966--Pub. L. 89-384, 1(g)(2), Apr. 8, 1966, 80 Stat. 104, added item 6167.
1958--Pub. L. 85-866, title II, 206(b), Sept. 2, 1958, 72 Stat. 1684, added item 6166.
EFFECTIVE DATE OF 2018 AMENDMENT
Amendment by Sec. 41105(a) of Pub. L. 115-123 effective for agreements entered into on or after the date which is 60 days after the date of the enactment of this Act [Enacted: Feb. 9, 2018].
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Sec. 509(c) Of Pub. L. 109-222 effective for offers-in-compromise submitted on and after the date which is 60 days after the date of the enactment of this Act [Enacted: May 17, 2006].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 843(a) and (b) of Pub. L. 108-357 effective for agreements entered into on or after date of the enactment of this Act [Enacted: Oct. 22, 2004].
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Sec. 4002(g) of Pub. L. 105-277 effective as if included in the provisions of the IRS Restructuring and Reform Act of 1998 to which it relates.
Amendments by Sec. 3467(a) of Pub. L. 105-206 effective on the date of the enactment of this Act [enacted: July 22, 1998].
Amendment by Sec. 3462(c)(2) of Pub. L. 105-206 effective for proposed offers-in-compromise and installment agreements submitted after the date of the enactment of this Act [enacted: July 22, 1998].
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 201(c) of Pub. L. 104-168 provided that: “The amendments made by this section [201] shall take effect on the date 6 months after the date of the enactment of this Act [enactment date: July 30, 1996; effective date: Jan. 30, 1996].
Section 202(b) of Pub. L. 104-168 provided that: “The amendment made by subsection (a) [202(a)] shall take effect on January 1, 1997.”
STATEMENTS REGARDING INSTALLMENT AGREEMENTS
Sec. 3506 of Pub. L. 105-206 provided that: “The Secretary of the Treasury or the Secretary's delegate shall, beginning not later than July 1, 2000, 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.”
EFFECTIVE DATE
Section 6234(c) of Pub. L. 100-647 provided that: “The amendments made by this section [enacting section 6159 of this title 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].”