Glossary

Partial payment installment agreement

A partial payment installment agreement is an IRS payment plan in which the monthly payments will not pay off the balance before the collection statute expires, so the remaining debt is never collected.

How it works

A partial payment installment agreement is a payment plan whose monthly payments will not pay off the balance before the collection statute expires, so the remaining debt is never collected. The IRS requires a full financial statement, may require selling assets with equity, and reviews the agreement every two years.

Why it matters

For a debt with a few years left on the collection statute, it can resolve the balance for far less than an Offer in Compromise would, and without pausing the clock.

Related: collection statute, Offer in Compromise.

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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.

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