Line items

Streamlined processing of installment agreements is more widely offered

More taxpayers can now have their installment payment agreements approved more easily—without a tax lien in many cases—after the IRS announced broader eligibility criteria in October for its streamlined processing.

According to the IRS website at, streamlined processing is now available for individuals with an assessed balance due of tax, penalties, and interest of between $25,001 and $50,000, with no collection information statement required and, if payment is by direct debit or payroll deduction, no notice of federal tax lien. Monthly payments must be in an amount that satisfies the liability in full within 72 months or, if sooner, the collection statute expiration date. The announcement adds a provision for individual taxpayers with balances of between $50,001 and $100,000, who are eligible if they agree to pay their total assessed balance over 84 months or by the applicable collection statute expiration date—but a notice of federal tax lien is required. No collection information statement is required if the taxpayer agrees to make payment by direct debit or payroll deduction.

The expanded eligibility will be available through September 2017 as a test program and could be made permanent, the IRS said.

Security Summit introduces 'trusted customer' features

The IRS introduced or expanded security features for the 2017 tax filing season, while it reported that fewer fraudulent returns had entered its processing system during 2016 than the year before. In News Release IR-2016-144, the Service attributed the initiatives and improvements to its ongoing Security Summit with state tax authorities and preparer and software industry representatives. These "trusted customer" measures for 2017 included:

  • More and updated individual and business taxpayer return authentication "data elements" and greater sharing of them among the summit's partners;
  • Cooperation by states with the financial services industry to identify suspicious refunds before they are deposited;
  • Expanded use of a 16-digit verification code on Form W-2, Wage and Tax Statement, to 50 million forms, up from 2 million in 2016; and
  • Enhanced password requirements by the software industry.

Summit partners also planned to launch a joint Identity Theft Tax Refund Fraud Information Sharing and Analysis Center, the IRS said.

During the first nine months of 2016, the summit's efforts figured in a reduction in new identity theft affidavits by more than half from the year before, the IRS said.

IRS scraps COD 36-month nonpayment testing period

The IRS issued final regulations (T.D. 9793) in November deleting the 36-month nonpayment testing period from the list of "identifiable events" in Regs. Sec. 1.6050P-1(b)(2) for determining the date of a debt discharge for purposes of recognizing cancellation-of-debt (COD) income. The final regulations were adopted without significant change from proposed regulations issued in 2014 (REG-136676-13). The IRS added the rule in 1996 to provide taxpayers and creditors a clearer test than the previous facts-and-circumstances criterion, but the provision had largely produced the opposite effect without increasing compliance. For more, see "Tax Matters: IRS Proposes Scrapping COD Nonpayment Testing Period," JofA, Jan. 2015, and "Tax Practice Corner: Form 1099-C and COD Income: Key Timing Issues," JofA, March 2016.


Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.


Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.