In very simple terms, a Partial Payment Installment Agreement (PPIA) requires you to give part of what you earn to the IRS, and an Offer in Compromise (OIC) requires you to give part of what you own to the IRS.
Anatomy Of An IRS Partial Payment Installment Plan
The Service generally accepts PPIA applications if the taxpayer has insufficient assets to liquidate and insufficient income for a full payment plan. Here are the specific qualifications per the Internal Revenue Manual:
- Limited disposable monthly income,
- Owe over $10,000,
- File Forms 433 and 9465,
- No outsanding returns,
- Not in bankruptcy,
- No offer in compromise in force, and
- Limited assets.
Calculate your payment based on your disposable income in Form 433. The IRS expects the maximum, but do not go too high or you risk defaulting on the agreement. The filing fee is $225 ($107 if you elect the direct debit option).
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