Tax Administration: Administrative Improvements Possible in IRS' Installment Agreement Program
Released: 1995-05-02T00:00:00

Letter

Background

IRS expects individual taxpayers to pay the full amount of tax owed when they file their tax return. However, Section 6159 of the Internal Revenue Code provides for taxpayers to pay their taxes in installments when full payment is not possible.

Taxpayers who cannot pay their taxes are subject to IRS’ collection process. IRS’ routine collection process can involve three stages, and taxpayers may enter into an installment agreement during any stage. In the first stage, IRS is to send a series of notices to taxpayers requesting payment. Cases unresolved by these notices may be referred to the second stage—ACS telephone call sites. IRS employees at these sites are to contact taxpayers to secure payments and contact banks and employers to identify levy sources. The employees are to also answer calls from taxpayers who have been subjected to collection actions, such as levies and liens. If ACS call site employees cannot resolve a case, it may be referred to an IRS district office—the third stage in the collection process—for further collection action.

IRS made changes to its installment agreement program in April 1992 making it easier for taxpayers to obtain agreements. IRS made the following changes under the revised program.

Staff in all offices with taxpayer contact were delegated authority to approve installment agreements of up to $100,000.

The thresholds for which IRS can approve an installment agreement without filing a lien increased from $2,000 to $10,000 and without requiring taxpayers to provide financial information demonstrating the need for an agreement increased from $5,000 to $10,000. IRS refers to these agreements as streamlined agreements. IRS allowed taxpayers to request installment agreements when they file by attaching a Form 9465, Installment Agreement Request, or note to their tax returns (see app. I). These agreements, called pre-assessed agreements, do not go through IRS’ routine collection process.

IRS made these changes to the installment agreement program to (1) improve voluntary compliance by emphasizing to taxpayers that installment payments are an option available to them to pay their tax debts if full payments cannot be made on time; (2) expedite the IRS collection process by bringing more delinquent accounts into a current status sooner, thereby increasing collections on such accounts in the form of installment payments; and (3) enhance its “one-stop service” concept by allowing staff in all functions with taxpayer contact to approve agreements.

In addition, IRS recently developed procedures to implement another change in the program—charging user fees for installment agreements. The Treasury, Postal Service, and General Government Appropriations Act of 1995 (P.L. 103-329) authorized the Secretary of the Treasury to supplement IRS’ appropriations through the imposition of user fees for services performed by IRS. As a result, in March 1995, IRS began charging a $43 user fee for a new installment agreement and a $24 user fee for amending or reinstating an existing agreement.

Objectives, Scope, and Methodology

Our objectives were to review (1) the increase in installment agreements following changes IRS made in April 1992; (2) the effects these changes had on IRS’ collection activity; (3) concerns raised by IRS’ internal auditors regarding these changes; and (4) administrative aspects of the program, such as the information IRS provides taxpayers regarding installment agreements, and opportunities for improvement. We also collected descriptive information on taxpayers who elected to pay past due taxes through installment agreements.

To address the four objectives, we did the following:

We met with officials in IRS’ National Office of the Assistant Commissioner for Collections to discuss IRS’ objectives for the installment program and gather information about the program’s administration and progress.

We met with IRS officials in the Cincinnati Service Center (Collections Branch) and the Cincinnati District Office (including the Taxpayer Service, Collection, and Examination divisions) to obtain information on the experiences of these IRS personnel with the revised procedures. We selected the Cincinnati Service Center because we had available experienced staff in that area.

We discussed the installment agreement program changes with members of the American Institute of Certified Public Accountants, the Federation of State Tax Administrators, the National Consumer Law Center, the Consumer Federation of America, and a Cincinnati-based commercial bank.

We reviewed IRS internal audit and management reports concerning the installment agreement program.

To accomplish our objective of collecting descriptive information on taxpayers, we analyzed the 722 useable cases from our random sample of 900 installment agreements from IRS’ Service Centers in Atlanta, GA; Cincinnati, OH; and Fresno, CA. The sample was taken from the inventory of 628,285 agreements at the 3 service centers as of April 23, 1994. In reviewing the sample, we obtained information about the agreements, such as (1) the tax periods covered by the agreements; (2) the original amount and current balance of the agreements; (3) the agreement payment history; and (4) certain taxpayer financial characteristics, such as adjusted gross income and source of income. The sample results were indicative of the installment agreement inventory at the three IRS service centers as of April 23, 1994. However, the results are not projectable to IRS’ total universe of installment agreements and may not be indicative of the inventory at any other point in time. Appendix II describes our sampling methodology in more detail.

We did our audit work from January 1994 through November 1994 in accordance with generally accepted government auditing standards. On March 27, 1995, we met with IRS National Office officials to obtain their comments on a draft of this report. IRS representatives at that meeting included the Acting Assistant Commissioner, Collection. Their comments are summarized on page 16 and incorporated in this report where appropriate.

Installment Agreement Program Has Grown Rapidly

As stated earlier, the installment agreement program grew rapidly during fiscal years 1991 through 1994. As shown in table 1, significant growth took place between fiscal years 1992 and 1993. While part of this growth may be attributable to the April 1992 program changes, IRS officials said that changes to federal tax withholding tables in 1992 caused many taxpayers who would normally have received refunds to owe taxes when they filed their returns in 1993. IRS estimated that installment agreement requests would increase by about 39 percent because of the changes to the withholding tables.

Installment Agreements Play a Greater Role in IRS Collections

Since 1992, installment agreements have played an increasing role in IRS’ collection process. Table 2 shows that installment agreements have made up an increasing percentage of IRS’ accounts receivable inventory for individual taxpayers since 1992.

Table 3 shows that installment agreements have accounted for an increasing percentage of IRS’ total collections. IRS National Office collection officials said that the increase in total collections between fiscal years 1993 and 1994 was a positive result of the changes made to the installment agreement program.

In raising service center and taxpayer service authority to grant installment agreements from $5,000 to $10,000, IRS wanted to shift some of the collection work from ACS call sites to service center collection and district taxpayer service offices. Some shift in workload has occurred. Taxpayer service and service center staffs originated about 82 percent of all agreements in fiscal year 1994, up from 43 percent in fiscal year 1991. Most of the increase was due to these two staffs granting streamlined agreements. ACS call sites granted fewer agreements in fiscal year 1994 (about 381,000 or 15 percent of agreements) than in fiscal year 1991 (about 579,000 or 53 percent of agreements).

In shifting the installment agreement workload to service center and taxpayer service staff, IRS hoped to increase ACS collections by freeing up ACS staff to work on higher dollar cases. However, the expectation of increased collections had not materialized since ACS collections per staff year dropped between fiscal years 1992 and 1994 from $1.71 million to $1.44 million in current year dollars. Overall, the amount collected at ACS sites decreased from $4.88 billion to $3.30 billion during the same period.

IRS collection officials said that the lower ACS collections are due, in part, to their decision during this same period to increase the deferral level—the amount under which delinquent accounts are not pursued beyond the notice stage, except to offset refunds. According to IRS officials, this increase reduced ACS workloads more than expected and contributed to reduced ACS collections. IRS subsequently lowered its deferral level in April 1994, a move IRS officials expect will increase ACS workloads and the resulting collections.

Another indication of the greater impact the installment agreement program is having on collections was the increased number of balance due accounts that are being resolved earlier in the collection process. IRS data show that more balance due accounts are being favorably resolved by taxpayers paying or arranging to pay the amounts owed without IRS resorting to collection notices and subsequent collection actions. Between fiscal years 1991 and 1994, accounts favorably resolved before a collection notice rose from 41 percent to 52 percent, with installment agreements accounting for a growing share of the favorable early resolutions. In fiscal year 1994, installment agreements accounted for 41 percent of the favorable early resolutions, up from 14 percent in fiscal year 1991.

IRS’ Internal Audit Questioned Implementation of the Installment Program

IRS’ internal audit raised several questions regarding the installment agreement program since IRS implemented the April 1992 changes. In September 1994, IRS’ internal auditors raised concerns about whether (1) the new procedures for granting installment agreements were encouraging taxpayers to choose installments when they could be paying their taxes in full and (2) the program was leading some taxpayers to accumulate debt they may not be able to pay.

Some Installment Payers May Be Able to Pay in Full

The installment agreement program was established to provide taxpayers who cannot pay their taxes in full, when they are due, an opportunity to pay in installments. Before the program was revised in April 1992, taxpayers whose agreements were for tax debts above $5,000 were required to provide financial data to substantiate their inability to pay in full and on time. Under its streamlined procedures, IRS relies on taxpayers to determine for themselves whether they can pay in full or want to pay in installments, as long as the amount owed does not exceed $10,000 and the payment period meets IRS requirements. IRS recognizes that this may result in some taxpayers opting for installment agreements even though they could have paid in full and on time. IRS collection officials told us they did not know the extent to which this occurs, but they believed the benefits from streamlining outweigh any unintended negative effects of making installment agreements available to taxpayers who can pay in full.

This issue was raised by IRS’ internal auditors in their September 1994 report on using and processing installment agreement requests received with tax returns. The auditors reviewed a sample of 2,824 pre-assessed installment agreements—those agreements requested by taxpayers when they filed their tax returns—granted in 1993 and found that 22 percent of the taxpayers had paid in full with their return the previous year, while another 10 percent had fully paid later during the collection notice process. The auditors reasoned that on the basis of the taxpayer’s payment history, some of these taxpayers could have paid their taxes in full in the year they entered into an agreement. In addition, to obtain more conclusive information on whether some taxpayers who entered into installment agreements could have paid their taxes on time, the auditors contacted 87 taxpayers who received pre-assessed agreements. The auditors were told by 41 percent of these taxpayers that they could have fully paid their accounts by withdrawing savings, liquidating assets, or borrowing.

In response to IRS’ internal audit findings, IRS has begun taking steps to discourage taxpayers who can pay in full from using installment agreements. For example, IRS revised Form 9465 to advise taxpayers to consider other alternatives, such as bank loans, before requesting an installment agreement when filing a tax return.

Some Taxpayers May Be Accumulating Debt

IRS’ streamlined procedures allow for new tax debt to be added to an existing installment agreement without a review of a taxpayer’s financial condition or of possible remedies to incurring future debt, provided the new aggregate balance does not exceed $10,000 and the payment period meets IRS requirements. IRS data show that about 16 percent of the agreements granted in fiscal year 1994 were added to existing installment debt. In their September 1994 report, IRS internal auditors expressed concern that IRS procedures allowed taxpayers to incur tax debts beyond what they could reasonably be expected to pay. The auditors stated that allowing taxpayers to add tax debt beyond what could be paid within a reasonable time would increase IRS’ accounts receivable balance and its costs to collect taxes.

According to an IRS official, one explanation for why the practice of accumulating debt was allowed is that IRS accommodated taxpayers who had balance due accounts because of 1992 changes in the withholding tables. During that period, IRS assumed that many taxpayers would owe taxes unexpectedly and allowed taxpayers to pay those taxes by adding debt to existing agreements under streamlined procedures.

That policy continued through 1994 when, as a result of concerns from IRS’ internal auditors, IRS took several steps to address the issue for the 1995 tax filing season. For example, the monthly installment agreement reminder notices for December 1994 included a special reminder to taxpayers. The reminder stated that under the terms of their existing agreements the taxpayers were not eligible for another installment agreement while their existing agreements were in effect and that all federal tax liabilities must be paid in full or they would be in default. Also, Form 9465 was revised to inform taxpayers that they are not to use the form if they were currently making installment payments and that the agreement would be in default if all liabilities were not paid in full. In addition, in January 1995, IRS issued procedures to field personnel working installment agreements to prevent taxpayers from adding new tax debt to existing liabilities. IRS plans to revisit this issue before the 1996 tax filing season.

IRS internal auditors also reviewed whether taxpayers with installment agreements acted on their own to avoid the need for future agreements. In doing so, IRS contacted 87 taxpayers who were granted pre-assessed installment agreements and found that 39 percent had not adjusted their withholding or estimated payments to avoid owing money on successive tax returns. Although acceptance letters to taxpayers contain instructions for making such adjustments, no such instructions appear on Form 9465, which is the initial form completed by taxpayers who request pre-assessed agreements.

The auditors recommended that IRS include a section on Form 9465 for taxpayers to identify the cause of their tax debts and the steps taken to ensure that the condition does not recur the following year. Additionally, IRS’ Research Division is studying a group of taxpayers to determine the cause for their delinquencies and through that study intends to determine how best to solve the problem of underwithholding and underestimated payments.

IRS Could Improve Certain Administrative Aspects of the Program

As we discussed earlier, the installment agreement program grew rapidly during fiscal years 1991 through 1994. Because of this growth, we believe the administrative operation and efficiency of the program has become increasingly important. In that regard, we reviewed certain aspects of the program and offer several suggestions that could lead to more efficient administration. Specifically, we are concerned about the (1) lack of information taxpayers receive about the length and costs of installment agreements, (2) extent IRS has taken advantage of opportunities to improve program efficiency, and (3) amount of installment agreement debt by taxpayers with agreements lasting more than 5 years.

IRS Could Provide Taxpayers Additional Information on Installment Agreement Costs

During the term of an agreement, a taxpayer continues to accrue interest and penalty charges on the unpaid balance of the debt. IRS advises taxpayers in its agreement application forms and acceptance letters that interest and penalties will continue to accrue while they are making installment payments. However, IRS does not tell taxpayers the total estimated cost of the agreement, including interest and penalty accruals, nor does IRS tell taxpayers how long it will take to pay off their debt. The lack of information provided by IRS contrasts with prevailing private sector practices, which are governed by truth-in-lending laws.

Penalty and interest accruals add considerably to the cost and payoff period of an agreement. For example, assume a taxpayer agrees to make $100 monthly payments on a $2,800 tax debt (the median amounts from our sample). To pay off interest and penalty accruals, the taxpayer would need to make 6 additional monthly payments (34 payments versus 28 payments) and pay an additional $544 (assuming the 0.5 percent per month penalty rate and monthly compounding of interest at 9 percent). Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis computed from the federal short-term rate based on daily compounding.

Representatives of consumer groups told us that providing taxpayers with better cost information could lead some taxpayers to consider and use other options to pay their tax debts before choosing installment agreements or assuming long payoff periods. By providing more information to taxpayers on the cost of agreements, IRS may be able to limit agreement use more closely to taxpayers who are unable to pay their taxes on time in a lump sum.

IRS officials agreed that more information would be a factor in deterring some taxpayers with other available resources from using IRS’ installment agreement program to pay their taxes. However, IRS officials are reluctant to provide specific cost and payoff period projections to installment agreement applicants. The officials are concerned that the estimates they provide at the beginning of an agreement could be misleading because these estimates could change over the life of the agreement. For example, the estimates could be affected by interest rates that are subject to quarterly adjustment and by missed taxpayer payments. A method to alleviate this concern would be to include revised cost and payoff period projections in the monthly statements that IRS sends taxpayers during the course of an agreement. These notices already include information specific to a taxpayer’s agreement, such as the amount of payment due and the current unpaid balance.

Greater Use of Direct Debit Payments Could Improve Efficiency

IRS offers taxpayers the option of making installment payments automatically by directly withdrawing funds from the taxpayer’s bank account. According to IRS, the advantages to direct debit agreements are they (1) are cheaper to service than the standard agreement, (2) eliminate the chance that a taxpayer will forget to make a payment or send less than the agreed upon payment amount, (3) eliminate the float time associated with processing paper remittances, and (4) may reduce default rates.

Although direct debit agreements offer these advantages to IRS, they made up less than 2 percent of the agreements in IRS’ inventory at the end of fiscal year 1994. IRS collection officials explained that one reason for the low rate of direct debits is that staff who set up installment agreements view direct debits as additional work because the processing involves performing more steps and gathering more information from taxpayers.

According to IRS data, pre-assessed installment agreements accounted for almost 31 percent of the 2.6 million new agreements in fiscal year 1994. Form 9465, the form used by taxpayers to request pre-assessed agreements, does not mention the direct debit option (see app. I), leaving it up to IRS staff to pursue this option later. As noted, however, IRS collections officials indicated that this reliance on staff has limited the number of direct debits. Because of the advantages of the direct debit payment method, it may be worthwhile for IRS to test a revision of the form to include space for taxpayers to authorize direct debits and supply the information necessary to set them up.

Sending Some Default Notices by Regular Mail Could Reduce Costs

When taxpayers default on their installment agreements, service center staff must review the taxpayers’ accounts and send them a default notice. That notice is a statement informing the taxpayer that the account is not current and, if not corrected, the taxpayer is subject to levy action. Depending on how taxpayers respond to these notices, IRS staff may reinstate the agreement; take some other collection action, such as a levy or lien filing; or place the account in a deferred status where only passive collection actions, such as refund offsets are taken.

One service center has suggested that some of the costs incurred on defaulted agreements may be reduced if IRS could send default notices by regular mail rather than certified mail. This change would replace a $1.29 letter with a 23-cent letter (presorted rate) and also reduce some handling costs. Since defaults are not uncommon, the savings in postage costs could be significant. The service center estimated its own annual savings would be nearly $150,000.

Our analysis suggests that the service center suggestion has merit. We realize that some default notices may still need to be sent by certified mail because they are used to give taxpayers notice of impending levy actions against their assets. Section 6331(d) of the Internal Revenue Code requires that IRS inform taxpayers in person or by certified mail 30 days before taking levy actions. Other defaulted installment agreements, however, are placed in deferred status, and no levy action is pending because collection action is limited to periodic notices and offsets against future refunds. Our review of the October 1 through 7, 1994, listing of 1,933 defaulted agreements in the Central Region showed that 62 percent of these agreements were below the deferral level. IRS officials agreed that taxpayers in these instances would not need to be sent default notices by certified mail. The officials added that notices for cases subject to levies could continue to be coded to send by certified mail.

Protracted Agreements Account for a Large Percentage of Installment Debt

According to IRS data, in 1994 the average installment agreement was paid off in about 9.5 months. However, a large portion of IRS’ installment debt is for agreements that will run for more than 5 years if payments are made at their current levels. Such agreements are costly to administer, and IRS considers them riskier than shorter term agreements. IRS’ manual states that installment agreements lasting more than 5 years are not likely to be paid off. Thus, these protracted agreements are candidates for other options, such as an offer in compromise, which is a program that allows taxpayers to liquidate their tax liability through a lump-sum settlement for less than the amount owed.

About 18 percent of the agreements we reviewed from three service centers were protracted agreements. These agreements accounted for approximately 53 percent, or $846 million, of the installment debt owed at the three centers. For these agreements, the median balance owed was $5,780, the median monthly payment was $100, and the projected median payoff period was 7.6 years.

Some of the protracted agreements in our sample are unlikely to ever be paid off because current payments were not keeping up with accruing interest. These agreements made up about 16 percent of the protracted agreements we reviewed, with a current unpaid balance totaling $292 million. The median monthly payment on these agreements was $50, and the median unpaid balance was $17,530. At IRS’ 9-percent annual interest rate as of December 1994, 1 month’s interest on the median unpaid balance amounted to $131.

IRS officials acknowledged the existence of these types of agreements in their inventory, adding that sometimes accepting a taxpayer’s installment payment may be its best option. The officials explained that these payments often represented amounts that may otherwise not be collected. IRS’ procedures require staff to periodically review agreements with terms exceeding 3 years to reevaluate taxpayers’ financial conditions. Presumably, if the review indicated a better payment option, IRS would pursue it.

Conclusions

Since 1991, taxpayer use of installment agreements has grown considerably, and installment agreements have accounted for a growing portion of IRS’ collection activity. The program grew more rapidly after IRS made changes in April 1992. IRS internal auditors, however, reported that some taxpayers are using installment agreements even though they were able to fully pay their taxes. This practice conflicts with IRS’ intent to reserve installment agreements for taxpayers who cannot otherwise pay their taxes in full when they are due. The auditors also raised concerns about the ease with which taxpayers could accumulate additional tax debt by adding new income tax liabilities to existing agreements. IRS has acted to address the internal auditors’ concerns.

Our work surfaced several other concerns about certain administrative aspects of the program. For example, IRS does not tell taxpayers the extent that interest and penalty accruals will add to the costs of installment agreements and the payoff time. Providing this information may influence some installment payers to pay in full or make larger monthly payments. In addition, IRS could reduce some of the administrative costs of servicing agreements by (1) encouraging more taxpayers to make installment payments by direct debit and (2) mailing some default notices by regular mail instead of certified mail.

Our sample of installment agreements contained a substantial amount of installment debt associated with agreements having payoff periods longer than 5 years. This length of time makes collection of the debt risky and more expensive to administer, according to IRS. IRS reviews agreements every 3 years to explore payment options.

Recommendations

To improve the information provided to taxpayers and the administration of the installment agreement program, we recommend that the Commissioner of Internal Revenue notify taxpayers about projected total costs and payoff periods when setting up agreements with taxpayers and when mailing monthly reminder notices, experiment with Form 9465 to test whether having space for taxpayers to authorize direct debit installment payments increases the frequency with which this option is used, and send agreement default notices to taxpayers by regular mail instead of certified mail unless an account is being referred for levy action.

Agency Comments and Our Evaluation

Responsible IRS officials, including the Acting Assistant Commissioner, Collection, reviewed a draft of this report and provided oral comments in a meeting on March 27, 1995. The officials said that the report was a fair and accurate assessment of the installment agreement program and that they generally agreed with our recommendations. In response to the recommendations, the Acting Assistant Commissioner said that: IRS will study the feasibility of notifying taxpayers about the projected costs and payment periods of installment agreements. If notification is not feasible under its existing computer systems, IRS will pursue changes as part of its Tax Systems Modernization. In the interim, IRS plans to modify the monthly reminder notice in 1996 to provide taxpayers with a breakdown of the current balance due and penalty and interest charges. IRS will consider options, including modification of Form 9465, to encourage taxpayers to authorize direct debit payments on their installment agreements. IRS will develop methods to identify defaulted installment agreement accounts it does not intend to take levy action against and send default notices to these taxpayers by regular mail.

We believe the actions that IRS proposes, if properly implemented, would be responsive to our recommendations.

We are sending copies of this report to other congressional committees; the Secretary of the Treasury; the Commissioner of Internal Revenue; the Director, Office of Management and Budget; and other interested parties. We will make copies available to others upon request.

The major contributors to this report are listed in appendix III. If you or your staff have any questions, you can reach me at (202) 512-5407.

IRS Form 9465 Installment Agreement Request (1995 Version)

Profile of Installment Agreements From GAO Sample

To profile characteristics of taxpayers with installment agreements, we used the active inventory of installment agreements as of April 23, 1994, at three IRS service centers—Atlanta, GA; Cincinnati, OH; and Fresno, CA. We selected these centers because of their larger inventories and the availability of our staff to review the sample. We identified active installment agreements by obtaining IRS’ Taxpayer Service and Returns Processing Categorization of Accounts Receivable (TRCAT) file for each of the three service centers. We isolated installment agreements from the individual master file and then took a stratified random sample of 900 installment agreements from the TRCAT file—300 from each service center. We were able to analyze 722 of these cases.

Table II.1 gives information on the total number of cases we sampled from the three service centers. Since we used a probability sample of installment agreements to develop our estimates, each estimate has a measurable precision or sampling error that may be expressed as an upper and lower limit. A sampling error indicates how closely we can reproduce from a sample the results that we would obtain if we were to take a complete count of the study population using the same measurement methods. The difference between the upper and lower limits is called a confidence interval. Sampling errors and confidence intervals are stated at a certain confidence level—in this case 95 percent. For example, a confidence interval at the 95-percent confidence level means that in 95 out of 100 instances, the sampling procedures we used would produce a confidence interval containing the population value we are estimating.

We attempted to gather profile information from IRS’ records on all 900 sample cases. Due to a 2-month time lag in processing sample information and obtaining the records from IRS’ Integrated Data Retrieval System, we were unable to obtain profile data for certain cases. Therefore, we excluded these cases from our sample analysis. We found the majority of the excluded cases involved installment agreements that had been paid off by the taxpayer during the period we were gathering our data. We also excluded installment agreements cases that had been paid off but a new agreement was created during the 2-month lag in obtaining IRS records because these new cases were technically not part of the April 23, 1994, inventory. We excluded other agreements granted to pay off trust fund recovery penalties because these types of debts are not related to payments of personal income taxes and would have biased our analysis. Finally, we excluded cases that IRS was unable to locate in its records. Table II.2 gives the reasons for excluding sample cases and the estimate for each category of excluded cases.

Table II.3 contains profile information we gathered on the sample installment agreements taken from the TRCAT file. This file is a snapshot of the installment agreements IRS was managing on April 23, 1994. The sample results may not be indicative of all installment agreements managed by IRS at the three service centers at any other point in time.

Median age of agreements (months)

Median payoff period (months)

Median number of tax periods in Percent of agreements with added tax Percent of agreements covering: Three or more tax years Percent of agreements that have been in default status at least once Reason agreement was added (percent): Collection status when entering agreement (percent): Agreements granted for tax year 1992 only Median adjusted gross income of Percent with adjusted gross income over (continued)

Percent of total agreements made up by Percent of total unpaid balance made up agreements (millions)

Median unpaid balance for protracted Median monthly payment for protracted Median payoff period for protracted agreements (years)

Percent of protracted agreements made up by agreements with monthly payments insufficient to keep up with accruals Unpaid balance on agreements with insufficient payments (millions)

Major Contributors to This Report

General Government Division, Washington, D.C.

Cincinnati Field Office

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