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What Is a Partial Payment Installment Agreement? With a partial payment installment agreement, you pay monthly until the collection statute expiration date (CSED), usually 10 years after tax assessment. After the CSED, you do not need to pay more, even if your payments were less than what you owed. How Partial Payment Installment Agreements Work Partial payment installment agreements work in a simple way. For your better understanding, here is a simple analogy to show how it works. For example, someone owes $30,000 in taxes; however, one can only afford to pay $200 each month. The collection statute for one's installment expires in five years. If one qualifies for PPIA, one has to pay $200 every month for five years. After that, even if one has only paid $12,000, they won't owe anymore. But there's a twist. Every two years, the IRS checks the taxpayer’s financial situation again. Let's say after two years, the IRS sees the taxpayer's financial situation has improved. Then, the taxpayer might have to pay $300 each month instead of $200 for the rest of the five years. In the other case, if the IRS finds out the taxpayer inherited a vacation home, the IRS has the authority to make the taxpayer have to sell it or get a loan against it to pay off the taxes. This is a downside of these payment plans.