RD640 - Department of Taxation Report of the Workgroup to Study Current Federal and State Policies Concerning Installment Agreements Pursuant to House Bill 1369 (2023) – November 15, 2023

Executive Summary:

House Bill 1369 (2023 Acts of Assembly, Chapter 643) requires the Department of Taxation (the "Department") to offer installment agreements to individual income taxpayers in which the taxpayer may satisfy his or her entire tax liability over a term of up to five years. The legislation repealed the Department's authority to modify or terminate an installment agreement if the financial condition of the taxpayer has significantly changed or the taxpayer fails to provide a financial condition update upon request. House Bill 1369 also established a working group for the Department to study current federal and state policies concerning installment agreements and make recommendations regarding how the Department's policies could better align with installment agreement policies adopted by the Internal Revenue Service (IRS). See Appendix A.

As required by House Bill 1369, the work group was comprised of the following members:

• Two representatives from the Taxation Section of the Virginia Bar Association

• Two representatives from the Virginia Society of Certified Public Accountants

• Two representatives from the Virginia Society of Enrolled Agents

The Department contacted the stakeholder groups identified in the legislation to notify them of the work group and to request that each stakeholder group appoint two representatives to participate in the work group.

The work group met on July 13, 2023. Following the meeting, a survey was distributed to participants. Thereafter, the Department circulated a draft report for written comment. All responses to the survey and all comments received from the work group are attached as Appendix C and D, respectively. This is the final report of the work group.