Paying Old Payroll Taxes Over Time: Simple Payment Plans (Business Trust Fund) and Larger Agreements

For a business that owes Form 941 taxes and is still operating, a payment plan is often the most realistic resolution. But a payroll tax payment plan is not just a monthly number. It interacts with the Trust Fund Recovery Penalty investigation, the assessment statute, lien filing and the business's ongoing deposits.

On July 21, 2026, the IRS revised IRM 5.14.5. Among the changes, it replaced what had been called the In-Business Trust Fund Express Installment Agreement with a new name and new criteria: the Simple Payment Plan (Business Trust Fund). If you read older guidance, the terms and thresholds may not match.

What Changed in July 2026

The material changes table in the revised IRM 5.14.5 summarizes it. The subsection title changed from In-Business Trust Fund Express Installment Agreements to Simple Payment Plans (Business Trust Fund). The 24-month full-pay requirement was removed, and Revenue Officers must now use the IRS's payment calculator to ensure full payment by the collection statute expiration date. The IRS added rules prohibiting these plans when the request accompanies a levy release or meets "solely to delay" criteria. And it clarified when a TFRP determination is not required.

Older IRM sections still describe the prior criteria. IRM 5.7.4.2, last revised before the change, described the old express agreement as requiring an unpaid balance of $25,000 or less, liabilities only from the current or prior calendar year, and full payment within 24 months. The newer IRM 5.14.5.4 controls the payment plan itself. Ask the Revenue Officer which criteria they are applying.

The Simple Payment Plan (Business Trust Fund) Criteria

Under IRM 5.14.5.4, as revised July 21, 2026:

• Balance limit. The aggregate unpaid balance of assessment must be $25,000 or less. That includes tax, assessed penalties, interest and other assessments, but not accrued, unassessed penalties and interest. If pre-assessed liabilities are present, they count toward the $25,000 too.
• Pay-down allowed, with a catch. The business may pay the balance down before the agreement is granted. It may not use the first installment payment to get under the threshold.
• Full pay by the CSED. The plan must be calculated to pay all balances, including accruals, by the collection statute expiration date. Monthly amounts may change later, as long as the balance is paid by the CSED.
• Compliance. Filing and payment compliance must be verified. If the business is not in filing compliance, a plan cannot be granted. IRM 5.14.5.1.1 adds that businesses with employees must be current with federal tax deposits.
• Applies to sole proprietors too. The IRM says these agreements apply to business trust fund accounts, including sole proprietors.

What the IRS does not require for these plans:

• no field call to verify assets;
• no financial statement;
• no direct debit requirement; and
• no managerial approval.

The Revenue Officer must, however, document banking and accounts receivable information.

When These Plans Are Not Available

IRM 5.14.5.4 tells Revenue Officers not to grant a Simple Payment Plan (Business Trust Fund) if:

• the request is made in conjunction with a request for levy release; or
• the case meets "solely to delay" criteria under IRM 5.14.3.3, which the IRM says includes situations where there is an indication the business may be using pyramiding or successor entities to avoid tax responsibilities.

In those situations, the IRS completes the full financial analysis and the required TFRP determinations. The IRM also cautions that granting a plan may not be in the government's interest when the business has defaulted on prior agreements.

The lesson is timing. The streamlined route is for businesses that come forward, get current and ask for a plan before enforcement escalates. Our pyramiding guide explains why current deposits come first.

The TFRP Question

For owners and officers, this is the most important part. IRM 5.14.5.4 says a TFRP determination is not required only when all of the following are met:

1. the unpaid balance of assessment is $25,000 or less;
2. the taxpayer qualifies for and is granted a Simple Payment Plan (Business Trust Fund);
3. the entire liability will be paid in full by the CSED; and
4. the plan is granted within 120 calendar days of case assignment on the IRS's collection system.

The IRM adds that the IRS should not delay a TFRP determination solely because the balance is $25,000 or less. And if the TFRP was already recommended or assessed before the plan was granted, the Revenue Officer documents whether collection of the TFRP will continue or be deferred during the agreement.

The 120-day element matters. IRM 5.7.4.2 separately directs Revenue Officers to decide whether to pursue the TFRP no later than 120 calendar days after assignment. A business that wants the plan to also avoid a TFRP determination needs to move quickly.

Lien Filing

Per IRM 5.14.5.4, a Notice of Federal Tax Lien filing determination is not required for a Simple Payment Plan (Business Trust Fund). If the plan cannot be closed before the lien determination deadline, the Revenue Officer makes a timely lien decision. A lien may still be filed to protect the government, including where the business defaulted on prior agreements or has a history of pyramiding.

Balances Over $25,000: In-Business Installment Agreements

Businesses with larger trust fund balances fall under IRM 5.14.7, with a full financial analysis. The TFRP interaction is governed by IRM 5.7.4.8.1. A Revenue Officer can secure an in-business installment agreement rather than immediately asserting the TFRP, as long as the business qualifies, the TFRP assessment statute is appropriately extended, and the investigation is documented and preserved.

If the agreement will not fully pay all balances at least one year before the earliest TFRP assessment date, the IRM directs the Revenue Officer to complete interviews of all potentially responsible persons, secure their financial statements and collectibility determinations, request Form 2750 waivers extending the assessment period to the expected end of the agreement plus one year, and prepare the TFRP file to the point of assessment. The TFRP is then generally not assessed if the business meets the agreement's terms. Default triggers processing of the assessment. Our Form 2750 guide covers the waiver decision.

The IRM also states that while under an approved installment agreement, a corporation may not designate its monthly installment payments to the trust fund portion. Plan any designated payments outside the agreement. See our designation guide.

Non-Trust Fund Balances Up to $50,000

IRM 5.14.5.2 provides Simple Payment Plans for business non-trust fund liabilities with an unpaid assessed balance of $50,000 or less. That includes employment tax liabilities only when the trust fund portion has been paid in full and only the employer's share, penalties or interest remain. Paying off the trust fund portion first can move the remaining balance into the more flexible category.

Questions to Ask Before You Propose a Plan

• What is the exact unpaid balance of assessment today, and are there pre-assessed periods that count toward the limit?
• When was the case assigned, and how many of the 120 days remain?
• Are all returns filed, and are current deposits verified?
• Has a TFRP recommendation already been made for any period?
• Is a levy in place, which would take the streamlined plan off the table?
• If the balance is slightly over $25,000, can the business pay it down before the plan is granted?

Levy Protection

IRC 6331(k)(2) bars levy while a proposed installment agreement is pending, for 30 days after a rejection and during a timely appeal, while an agreement is in effect, and for 30 days after termination and during a timely appeal.

The firm's main site has a broader explanation of IRS installment agreements.

A payment plan can keep the doors open and keep the trust fund penalty off the owners. But only if the business is current, the request is early, and the numbers fit. Call (813) 229-7100. Let's talk.