Tax professionals warn that everyday expenses and lifestyle choices can derail IRS payment plans before they're approved
IRVINE, CALIFORNIA / ACCESS Newswire / February 13, 2026 / Many taxpayers seeking relief through IRS installment agreements may be surprised to learn that approval isn't based solely on how much they owe or earn. According to tax resolution specialists at Clear Start Tax, the Internal Revenue Service frequently reviews a taxpayer's spending habits-and can reject payment plans if expenses are deemed excessive or inconsistent with IRS guidelines.
Installment agreements allow taxpayers to pay their tax debt over time, but approval often hinges on detailed financial disclosures. These statements outline income, housing costs, transportation expenses, discretionary spending, and assets. Clear Start Tax warns that taxpayers who underestimate the scrutiny of these forms may face delays or outright rejection.
"The IRS doesn't just look at what you owe-it looks at how you live," said a spokesperson for Clear Start Tax. "If your spending appears high relative to your income, the IRS may determine you have the ability to pay more, or deny the agreement altogether."
According to Clear Start Tax, expenses such as high car payments, multiple vehicles, private school tuition, frequent travel, or non-essential subscriptions can raise red flags. Even legitimate expenses may be capped if they exceed IRS "allowable" standards, which differ from real-world costs in many regions.
"People assume an installment agreement is automatic, but it's not," the spokesperson added. "The financial statement tells a story. If that story suggests discretionary spending instead of financial hardship, the IRS may push for higher payments-or refuse the plan."
Tax experts caution that rejected installment agreements can leave taxpayers vulnerable to renewed collection actions, including liens or levies, especially if no alternative resolution is in place. Reviewing financial statements carefully and understanding how the IRS evaluates expenses can make the difference between approval and escalation.
"Transparency and preparation matter," Clear Start Tax noted. "Submitting a financial statement without understanding how the IRS interprets it is one of the most common-and costly-mistakes taxpayers make."
By answering a few simple questions, taxpayers can find out if they're eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt.
About Clear Start Tax
Clear Start Tax is a national tax resolution firm that assists individuals and businesses with resolving IRS and state tax liabilities. The firm focuses on compliance, negotiation, and long-term solutions designed to help taxpayers regain financial stability and avoid aggressive collection actions.
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Contact Information
Clear Start Tax
Corporate Communications Department
tech@clearstarttax.com
(949) 800-4011
SOURCE: Clear Start Tax
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/business-and-professional-services/irs-can-reject-installment-agreements-based-on-spending-clear-st-1133399
