Individual taxpayers who are unable to pay their tax debt immediately can make monthly payments through an Installment Agreement (IA) with the IRS. These agreements allow taxpayers to pay off their tax debt over time. The IRS uses Allowable Living Expenses (ALEs), expenses deemed necessary to provide for a taxpayer’s, and his or her family’s health and welfare and/or ability to produce income, to calculate a taxpayer’s ability to make IA payments; however many IAs do not require this financial analysis. This study investigates default rates and subsequent compliance for taxpayers who had an IA opened in calendar year (CY) 2014. It also compares subsequent filing and payment compliance behaviors of TAS customers and non-TAS taxpayers who had an IA opened in CY 2010, to see how the financial analysis provided by TAS affects subsequent compliance.
Read the full research study