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Section 8. Monitoring of Installment Agreements

5.14.8  Monitoring of Installment Agreements
  • 5.14.8.1   Overview
  • 5.14.8.2   IDRS Monitoring
  • 5.14.8.3   Non-IDRS Monitoring – Manually Monitored Installment Agreements
  • 5.14.8.4   Monitoring In-Business Trust Fund Accounts By Centralized Case Processing
  • 5.14.8.5   Monitoring by Revenue Officers
  • 5.14.8.6   Actions Necessary After Full Payment of Cases Monitored in Centralized Case Processing and by Revenue Officers
5.14.8.1  (09-30-2004) 
Overview
  1. The Integrated Data Retrieval System (IDRS) is used to monitor most Installment agreements for timely payments on accounts, as well as to determine whether taxpayers remain in compliance with current filing and paying requirements. IDRS also monitors agreements based on the locator numbers recorded at the time agreements are input. (Exhibit 5.14.1–2) Some agreements require special monitoring, such as when accounts reside on the Non-Masterfile (NMF) or if payment amounts are varied. These accounts must be manually monitored. This chapter also provides authority for revenue officers to manually monitor agreements with managerial approval.
5.14.8.2  (09-30-2004) 
IDRS Monitoring
  1. Follow ICS on-screen and help screen instructions to ensure installment agreements are routed properly for IDRS monitoring.
  2. Use IDRS to monitor installment agreements for IMF, out-of-business BMF, or in-business non-trust fund BMF modules in either notice or balance due status meeting these criteria:
    1. the payment must be for a fixed amount;
    2. the agreement must be monthly because even though payments may be submitted more often, IDRS monitors monthly; (any other than a monthly payment increment should be processed as a manually monitored installment agreement);
    3. all payment due dates are limited to calendar days 1 through 28.
  3. In order to allow for timely input to IDRS, agreements should call for first payments at least 30 days after the date agreements are input. If an earlier payment is required, hold the case for the first payment, then forward for IDRS input and monitoring.
  4. If a payment is received in the area office on an IDRS-monitored installment agreement, use Designated Payment Code (DPC) "99" on the posting document. Refer to Document 6209 for information on the use of Designated Payment Codes.
  5. Campuses may use status 60 to monitor extensions of time to pay. (See IRM 5.14.5.5(12) regarding systemic monitoring of extensions of time to pay by Campuses.)
5.14.8.3  (07-06-2005) 
Non-IDRS Monitoring – Manually Monitored Installment Agreements
  1. Certain assessments and agreements are not compatible with IDRS monitoring. The types of agreements listed below must be manually monitored in Centralized Case Processing to ensure compliance with the terms of agreements:
    1. NMF assessments in either notice or balance due status;
    2. agreements calling for variable or percentage amounts;
    3. agreements with irregular payment intervals;
    4. agreements secured from two or more parties at different addresses on the same liability;
    5. partial payment installment agreements as described in IRM 5.14.2.2;
    6. L Freeze modules during pending Joint and Several Liability Relief Under IRC section 6015 claims;
    7. any in-business trust fund BMF account; and,
    8. any other agreement not compatible with IDRS monitoring.
  2. The agreements specified in IRM 5.14.8.3(1) (a) through (i) above will be manually monitored, at local option, either at the group level or by Centralized Case Processing Support.
    Reminder:

    Centralized Case Processing monitors all In-Business Trust Fund Accounts, and all agreements approved in accordance with the procedures provided in IRM 5.14.2.2, unless – under unusual circumstances – revenue officer monitoring is approved.

  1. Taxpayers should be furnished an adequate supply of pre-addressed envelopes and advised no reminder notices will be issued.
  2. See IRM 5.14.11 for procedures on defaulted and terminated manually monitored installment agreements.
  3. When posting payments to manually monitored installment payments, use DPC "10" on posting documents. This code is designed to allow accumulation of data on these non-IDRS monitored agreements. See Document 6209 for information regarding other designated payment code indicators.
  4. Follow the procedures in IRM 5.14.7.4.2 (1) through (4) regarding approval of, and monitoring of, IBTF cases.
  5. Select "MMIA — Centralized Case Processing" in either Option A or Option B of ICS Installment Agreement pick list. (See IRM 5.14.7.4.2(5) for IBTF Cases.)
  6. Choose the appropriate Agreement Locator Number (ALN). ICS will automatically set the subcode to "901" and the location to " MMIA" .
  7. Follow the procedures in IRM 5.14.7.4.2(6) and IRM 5.14.7.4.2(7).
  8. ICS Installment Agreement Option A is used when no Form 433D has been prepared nor approved prior to submission of the agreement for approval on ICS. Approval by the group manager using ICS Installment Agreement Option A generates:
    1. Transaction code (TC) 971 Action Code (AC) 063, (see IRM 5.14.7.4.2(6));
    2. Approval notification to the revenue officer;
    3. An original and copy of the Form 433D ; and,
    4. Letter 2849 or 2850: These letters provide taxpayers with notice of the approval of their agreement as well as the terms and conditions of the agreements.
  9. ICS Installment Agreement Option B should be used if a hard copy Form 433D was prepared and approved outside of ICS. Option B does not generate the systemic information discussed in IRM 5.14.8.3(10). Also, use of Option B requires that the contact employee complete the following actions after manager approval:
    1. Request input of Transaction Code (TC) 971 Action Code (AC) 063 on all appropriate modules if no unreversed TC 971 AC 063 is on the module. This may be requested through ICS or on a paper document Form 3177 or Form 4844.
    2. The modules will not be placed in status 60 when submitted to Centralized Case Processing for monitoring. It is important to ensure that unreversed TC 971 AC 063s are on the balance due accounts.
    3. Forward approved agreements to Centralized Case Processing Support along with the original case file. To ensure proper disposition, write " Manually Monitored IA" on the routing slip or transmittal document, as well as on the agreement form itself.
    4. Follow the procedures in IRM 5.14.7.4.2.
      Caution:

      Choose Option B only if, and after, hard copy (non-ICS generated) 433D or 2159 was approved.

      Note:

      No SPB item is systemically created, therefore for accounts described in IRM 5.14.2.2, create one on ICS — see IRM 5.14.8.4 for additional information.

5.14.8.4  (07-06-2005) 
Monitoring In-Business Trust Fund Accounts By Centralized Case Processing
  1. See IRM 5.14.7.4.2 and IRM 5.14.9.5(5) for ICS and T-Sign instructions.
  2. After the revenue officer has closed the case with an In Business Trust Fund Agreement on ICS, a SPB item is automatically opened for monitoring in Centralized Case Processing Support.
  3. The centralized case processing employee needs to ensure:
    1. status 60 is input on all of the periods in the agreement;
    2. the original file is received, including the trust fund recovery penalty package if appropriate (see IRM 5.14.7.4.1.1); and
    3. that all items have been addressed in the agreement including earliest ASED and CSED.
    4. the entity subcode on ICS is 900 and the location code is " IBTF" . This should have automatically occurred through ICS.
    5. TFRP files are sent to Control Point Monitoring on Automated Trust Fund Recovery Application (ATFR) for inventory control while the installment agreement is being monitored.
    Note:

    If the taxpayer has been advised of the approval of the installment agreement (mailed or given approved agreement or a letter stating the agreement was approved) it is considered to be a valid agreement. Even if periods were not included , the agreement may only be defaulted and terminated for the reasons listed in IRM 5.14.11.3.

  1. The centralized case processing employee will then monitor the case monthly to ensure taxpayers:
    1. Make installment payments when due;
      Note:

      All payments will be applied in the best interests of the government. (See IRM 5.14.7.5.)

    1. Pay required federal tax deposits;
    2. File federal tax returns when due; and,
    3. Pay additional liabilities when due.

    Lists of these agreements may be generated in Centralized Case Processing based on the Locator Code on ICS of "IBTF" or Subcode "0215"

  1. If taxpayers remain in compliance with filing, paying and depositing requirements, no further case actions or contact is necessary, until the agreement is completed.
  2. If the taxpayers do not complete any one of the items in IRM 5.14.8.4(4) the following procedures should be followed:
    1. the centralized case processor should contact the taxpayer and request the payment, deposit or return, whichever is appropriate.
    2. if the taxpayer complies within the reasonable timeframe given, there is no need to begin default and termination procedures. Continue to monitor the installment agreement as before.
    3. if the taxpayer does not comply with the deadline given see IRM 5.14.11.5.
      Note:

      Also see IRM 5.14.7.6 regarding OIs sent by Centralized Case Processing.

5.14.8.5  (07-06-2005) 
Monitoring by Revenue Officers
  1. In rare instances a revenue officer may monitor an installment agreement in inventory if, due to its nature, personal monitoring is necessary, i.e. the lack of personal monitoring would greatly reduce the probability of collection.
  2. A revenue officer must secure the group manager’s approval to monitor any installment agreement in inventory. Managers should not routinely approve agreements for revenue officer monitoring.
  3. Choose either installment agreement Option A or Option B in ICS to monitor installment agreements in groups.
    1. For all manually monitored installment agreements listed above, follow the procedures in IRM 5.14.7.4.2 (1) through (4); then,
    2. Create an OI to monitor the case on ICS.
  4. Revenue officers will monitor these case like Centralized Case Processing, in accordance with the procedures provided in IRM 5.14.8.3.
  5. For revenue officer monitored accounts and other investigations from centralized case processing support: when the terms of an existing installment agreement (one which is already approved and established) are revised based on the taxpayer’s changing financial condition, a notice to the taxpayer explaining the change and giving the reasons for the change will be prepared. See Exhibit 5.14.4–1.
    Note:

    Do not use the Pattern Letter 2523 - Notification of Change in Installment Agreement, in Exhibit 5.14.4–1 to propose termination of installment agreements. Use Letter 2975. (See IRM 5.14.4.1.)

  1. Deliver Pattern Letter 2523 in any of the following ways:
    1. give to the taxpayer in person;
    2. leave at the dwelling or usual place of business of the taxpayer;
    3. send by certified or registered mail.
  2. See IRM 5.14.11 for Defaulted Installment Agreement procedures.
5.14.8.6  (07-06-2005) 
Actions Necessary After Full Payment of Cases Monitored in Centralized Case Processing and by Revenue Officers
  1. All installment agreements that are fully paid will be closed appropriately by the employee handling the file.
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