Streamlined installment agreements are now simple payment plans: the $50,000 rules

What changed

The IRS first announced simple payment plans in interim guidance: SBSE-05-0325-0008 (March 3, 2025) for individual accounts up to $50,000 and SBSE-05-0126-0008 (January 30, 2026) for business accounts. The revised IRM 5.14.5, effective July 21, 2026, incorporates both. Its material changes table says the revision “Removed the prior two-tier $25,000/$25,001-$50,000 structure and 72-month minimum payment rule” and requires the IAT Compliance Suite Payment Calculator to show full payment by the CSED.

Two caveats. First, ICS has not caught up: IRM 5.14.5.5 says that until programming is updated (anticipated January 2027) revenue officers close these cases under the old Streamlined Installment Agreement or IBTF Express menu choices and follow temporary procedures. Second, the Form 9465 instructions (Rev. July 2024) still describe the old $25,000 and $50,000 tiers and the 72-month rule. When the instructions and the IRM disagree, the IRM reflects how Collection employees are told to work the case.

Simple payment plan criteria

IRM 5.14.5.2 allows a simple payment plan when all of these are met:

• The aggregate unpaid balance of assessment (the CC SUMRY balance) is $50,000 or less. If pre-assessed liabilities exist, the pre-assessed amounts plus the UBA must be $50,000 or less.
• The taxpayer is an individual (IMF), an out-of-business sole proprietor, or a BMF taxpayer owing non-trust fund taxes.
• The proposed payment full pays all balances, including accrued penalties and interest, before the CSED, as calculated with the IAT Compliance Suite Payment Calculator.
• The taxpayer is in filing and payment compliance: all required returns filed and current on withholding, estimated tax or deposits.
• The request is not made solely to delay collection; prior defaults are reviewed under IRM 5.14.3.3.

Accounts in any status qualify, including notice status, balance due status and pre-assessed accounts. What the taxpayer does not have to do is significant:

• “A Collection Information Statement (CIS) is not required when the account meets the criteria for a Simple Payment Plan.”
• “A Notice of Federal Tax Lien (NFTL) determination is not required when granting a Simple Payment Plan.” A revenue officer may still file one at discretion, with documented justification and manager concurrence.
• “Managerial approval is not required to grant a Simple Payment Plan.”

The plan is available even to a taxpayer with money in the bank: IRM 5.14.5.2 says taxpayers may be granted simple payment plans “even when they can fully pay their accounts.” There is one tension to note. The same subsection reminds revenue officers that before considering a simple payment plan they “must first explore all available collection alternatives to resolve the account,” including borrowing against or selling an asset with equity. IRM 5.14.1.4 resolves it in the taxpayer's favor: equity need not be pursued when the taxpayer requests and qualifies for a simple payment plan and the agreement is appropriate on the facts.

Measuring the $50,000: the UBA

The threshold is measured on the unpaid balance of assessment, not the payoff amount. IRM 5.14.5.1.6 defines UBA as “The total assessed balance due on IDRS, including tax, assessed penalties, and assessed interest” and says it “does not include accrued (unassessed) penalties and interest.” A client whose transcript payoff is $53,000 may still qualify if the assessed balance is under $50,000.

A client over the line can pay down first. IRM 5.14.5.2 tells revenue officers to encourage taxpayers with assessed balances over $50,000 to reduce them to $50,000 or less, because doing so may eliminate the financial statement and allow up to 10 years (or the CSED, if earlier) to pay. IRM 5.14.1.4 gives the example of a $60,000 IMF balance: request a partial payment to bring the SUMRY balance to $50,000 or less, then grant the plan, provided the CSED is protected.

Payment amount, term and payment method

The old 72-month divisor is gone. The payment is whatever the IAT calculator shows will full pay all balances, including accruals, by the CSED; IRM 5.14.5.2 adds that “Monthly payment amounts may increase or decrease in the future, provided the unpaid balance is paid in full by the CSED.” On an older module with a near CSED, the required payment can be higher than the old 72-month amount; on a recent assessment it may be lower.

Direct debit and payroll deduction are optional. If the taxpayer chooses direct debit, the revenue officer secures Form 433-D; for payroll deduction, Form 2159. The setup fee depends on the method and channel: $29 online or $107 otherwise for direct debit, and $69 online or $178 otherwise for regular payments, effective July 5, 2026 (IRM 5.14.1.2). See installment agreements for the full fee table and low-income waivers.

Online, individuals can apply for a long-term plan if they owe $50,000 or less in combined tax, penalties and interest and have filed all required returns (IRS online payment agreement page). Note the online test uses combined tax, penalties and interest, which is stricter than the UBA test a revenue officer applies.

Simple payment plans (business trust fund)

For in-business trust fund accounts (unpaid withheld income and employment taxes, including sole proprietors), IRM 5.14.5.4 allows a simple payment plan when the UBA is $25,000 or less and the payment full pays by the CSED. Key differences from the individual version:

• “The taxpayer may pay the balance down before the agreement is granted, but may not use the first installment payment to reduce the balance to the threshold.”
• No field call to verify assets and no financial statement is required, but banking and accounts receivable information must be documented.
• Not available when the request accompanies a levy release request or meets solely-to-delay criteria, including pyramiding or successor entities.
• A TFRP determination is not required only if the UBA is $25,000 or less, the plan is granted, it will full pay by the CSED, and it is granted within 120 calendar days of case assignment on ICS.

Business accounts that do not fit, such as trust fund balances over $25,000, are handled under IRM 5.14.7 with financial analysis. Employment tax balances where only the employer share, penalties or interest remain (the trust fund portion paid) are non-trust fund and use the $50,000 rule. See the Trust Fund Recovery Penalty.

Guaranteed installment agreements

Guaranteed agreements are statutory. Under IRC 6159(c) the IRS “shall enter into an agreement” with an individual whose income tax (excluding interest and penalties) does not exceed $10,000, who has not failed to file or pay or entered into an agreement in the prior five years, who cannot pay in full, and who agrees to full pay within 3 years and stay compliant. IRM 5.14.5.3 notes: “Unlike the criteria for Simple Payment Plans, the $10,000 threshold applies only to the tax liability.” If the client does not qualify, IRM 5.14.5.3 directs employees to consider a simple payment plan before other alternatives. The $10,000 figure is set in the statute and is not inflation adjusted.

Practice points

1. Check the SUMRY-equivalent number. Total the assessed balances on all account transcripts, excluding accruals, before deciding a financial statement is needed.
2. Confirm compliance first. Unfiled returns or missing estimated tax payments block approval; get the current year's estimates or deposits current before the call.
3. Propose an amount that clears the CSED. Use the statute date calculator and a payoff projection; a proposal that will not full pay by the earliest CSED will be pushed toward a partial payment agreement and a full financial statement.
4. Watch for prior defaults. A history of defaulted agreements invites a solely-to-delay review under IRM 5.14.3.3, which requires group manager approval to deny on that basis.
5. Ask about the lien. No NFTL determination is required, but a revenue officer can still file with manager concurrence. Ask directly and document the answer.
6. Use the eligibility tool to sort guaranteed, simple and non-simple cases before calling.

Questions practitioners ask