Key Takeaways A Partial Pay Installment Agreement (PPIA) lets you make reduced monthly payments that won't fully pay off your tax debt before the 10-year collection statute expires Unlike an Offer in Compromise, a PPIA doesn't require a lump-sum payment or a lengthy application process The IRS reviews your PPIA every two years to reassess your financial situation PPIAs are available for any debt amount and can be combined with penalty abatement strategies Remaining unpaid debt is effectively forgiven when the Collection Statute Expiration Date (CSED) passes What Is a Partial Pay Installment Agreement? A Partial Pay Installment Agreement (PPIA) is a payment arrangement with the IRS where your monthly payments are set at an amount that will not fully satisfy your tax liability before the Collection Statute Expiration Date (CSED) — the 10-year deadline by which the IRS must collect what you owe. When the CSED passes, any remaining balance is legally uncollectible and effectively forgiven. Think of it this way: if you owe $300,000 and have 7 years left on your collection statute, a standard installment agreement would require monthly payments of approximately $3,571 ($300,000 ÷ 84 months). But if your financial analysis shows you can only afford $1,200/month, a PPIA would set your payments at that level. Over 84 months, you'd pay $100,800 — and the remaining $199,200+ (plus accumulated interest) expires with the statute. PPIA vs. Offer in Compromise: Which Is Better? The PPIA and the Offer in Compromise (OIC) both result in paying less than the full amount owed, but they work very differently: Factor Partial Pay Installment Agreement Offer in Compromise Payment Structure Monthly payments over remaining CSED Lump sum or 24-month payment plan Application Fee $43 user fee (or waived for low income) $205 application fee + 20% initial payment Processing Time 30-60...