Common use of Research Study Clause in Contracts

Research Study. The Importance of Financial Analysis in Installment Agreements (IAs) in Minimizing Defaults and Preventing Future Payment Noncompliance, vol. 2, infra. TAS research found that 42.8 percent of taxpayers with total positive income (TPI) less than their ALEs who had balances due of greater than $10,000 and entered into IAs in FY 2014 defaulted by FY 2016. 9 IRM 5.14.11.5(2)(b) (Jan. 1, 2015). 10 IRM 5.19.1.5.4.6(4) (Sept. 29, 2014). 11 TAS, Importance of Financial Analysis in Installment Agreements Research Study (2016). 12 IRS, Individual Returns Transaction File (Dec. 20, 2016); IRS, Compliance Data Warehouse (Dec. 20, 2016). TAS research suggests that the IRS is placing taxpayers into Installment Agreements (IA) where their total positive income is less than their Allowable Living Expenses. Taxpayers may agree to an IA they can’t afford out of fear of the IRS, a misunderstanding of the options available, or out of obligation to repay their debts at any costs. of assessment to collect the tax due — known as the collection statute expiration date (CSED).13 There are a variety of payment options for taxpayers that depend on factors such as the amount owed and the taxpayer’s compliance history.14 IAs are offered as a collection alternative mutually beneficial to taxpayers and the IRS — taxpayers can make payments to the IRS over time and spread out the burden of paying their tax accounts, and the IRS can increase revenue by collecting portions of tax due rather than nothing.15 The IRS offers several types of IAs.16 Congress has recognized the value of IAs, and in the IRS Restructuring and Reform Act of 1998 (RRA 98), it required the IRS to accept an IA proposal from a taxpayer if the taxpayer owed less than $10,000, had not failed to file a required tax return in the previous five years, failed to pay any tax shown on such return or entered into an IA, could not full pay the liability when due, and would full pay the tax due within three years of the agreement.17 This is known as a “guaranteed” IA. Subsequently, the IRS administratively created a “streamlined” IA by increasing the limit of tax due allowed under “guaranteed” IAs and the length of time granted to the taxpayer to repay the debt.18 Today, streamlined IAs are available to taxpayers with balances due of $50,000 or less which will be repaid in installments in six years or less.19 Other IAs, such as regular (non-streamlined) IAs and PPIAs require financial analysis and the completion of a Collection Information Statement (CIS) and generally require user fees and result in the filing of a Notice of Federal Tax Lien (NFTL).20 13 IRC § 6502(a).

Research Study. The Importance of Financial Analysis in Installment Agreements (IAs) in Minimizing Defaults and Preventing Future Payment Noncompliance, vol. 2, infra. TAS research found that 42.8 percent of taxpayers with total positive income (TPI) less than their ALEs who had balances due of greater than $10,000 and entered into IAs in FY 2014 defaulted by FY 2016. 9 IRM 5.14.11.5(2)(b) (Jan. 1, 2015). 10 IRM 5.19.1.5.4.6(4) (Sept. 29, 2014). 11 TAS, Importance of Financial Analysis in Installment Agreements Research Study (2016). 12 IRS, Individual Returns Transaction File (Dec. 20, 2016); IRS, Compliance Data Warehouse (Dec. 20, 2016). TAS research suggests that the IRS is placing taxpayers into Installment Agreements (IA) where their total positive income is less than their Allowable Living Expenses. Taxpayers may agree to an IA they can’t afford out of fear of the IRS, a misunderstanding of the options available, or out of obligation to repay their debts at any costs. of assessment to collect the tax due — known as the collection statute expiration date (CSED).13 CSED) .13 There are a variety of payment options for taxpayers that depend on factors such as the amount owed and the taxpayer’s compliance history.14 history .14 IAs are offered as a collection alternative mutually beneficial to taxpayers and the IRS — taxpayers can make payments to the IRS over time and spread out the burden of paying their tax accounts, and the IRS can increase revenue by collecting portions of tax due rather than nothing.15 nothing .15 The IRS offers several types of IAs.16 IAs .16 Congress has recognized the value of IAs, and in the IRS Restructuring and Reform Act of 1998 (RRA 98), it required the IRS to accept an IA proposal from a taxpayer if the taxpayer owed less than $10,000, had not failed to file a required tax return in the previous five years, failed to pay any tax shown on such return or entered into an IA, could not full pay the liability when due, and would full pay the tax due within three years of the agreement.17 agreement .17 This is known as a “guaranteed” IAIA . Subsequently, the IRS administratively created a “streamlined” IA by increasing the limit of tax due allowed under “guaranteed” IAs and the length of time granted to the taxpayer to repay the debt.18 debt .18 Today, streamlined IAs are available to taxpayers with balances due of $50,000 or less which will be repaid in installments in six years or less.19 less .19 Other IAs, such as regular (non-streamlined) IAs and PPIAs require financial analysis and the completion of a Collection Information Statement (CIS) and generally require user fees and result in the filing of a Notice of Federal Tax Lien (NFTL).20 NFTL) .20 13 IRC § 6502(a).