TC 488: Installment / Manual Billing Status

What the code actually does

TC 488 updates a module (the IRS’s record for one tax period within the account) to collection status 14, described in Doc 6209 §8A as an "installment basis and/or manual billing" posture. The File column in that same reference marks TC 488 "B" — Business Master File only. It cannot post to an individual taxpayer’s Form 1040 account, and Doc 6209 ties status 14 specifically to Form 1041, Form 706 and 706NA, Form 4638, Form 990-C, Form 990-T, Form 1120, and Form 2290 accounts. Posting TC 488 clears the module’s TDA/BAL DUE (delinquent-account) actions and defers its routine notices and, on BMF, sets up a deferred action to issue CP 191.

The one use this page can document in IRM detail is narrower still. IRM 5.5.7.6.2 describes an estate that files Form 706 and is granted an IRC 6166 election — a deferral of the estate tax attributable to an interest in a closely held business, payable in up to ten annual installments after a deferral of up to five years — being placed into status 14, via TC 488 whenever Submission Processing doesn’t flag the election automatically. The same status occasionally reflects an IRC 6161 extension of time to pay instead. Neither is the individual or standard business Installment Agreement most practitioners mean by that phrase. That program runs on Form 9465 or Form 433-D, carries IDRS (the IRS’s Integrated Data Retrieval System) collection status 60 (with 61, 63, and 64 for suspended, deferred, and defaulted agreements), and is tracked through entirely different transaction codes — TC 971 with various Action Codes, per IRM 5.1.19.3.5.1 — under the policy in IRM 5.14.1. A TC 488 on a transcript is not evidence of that program, even though both put a module into a similar-looking holding pattern.

The collection statute — suspended, not merely unaffected

IRC §6503(d) suspends "the running of the period of limitation for collection of any tax imposed by chapter 11 ... for the period of any extension of time for payment granted under the provisions of section 6161(a)(2) or (b)(2) or under the provisions of section 6163 or 6166." For the IRC 6166 election TC 488 documents, that reaches the entire collection statute on the deferred estate tax, not just the installment coming due that year. IRM 5.5.7.6.2 states it directly: "The collection statute that is based on the assessment of tax is suspended while an IRC 6166 election is in effect ... If all the tax due is deferred under IRC 6166, then the collection statute is suspended on the full tax liability." That is the opposite of the rule governing the standard Installment Agreement, where the CSED keeps running — do not import that assumption here.

The suspension runs from the original assessment date, not from TC 488’s own posting date. IRM 5.5.7.6.2’s own worked example makes the point explicitly: a TC 150 assessment posts, a TC 488 follows weeks later, and "[e]ven though the TC 488 was input after the TC 150 date, the IRC 6166 election was taken when the return was filed so the suspension of the collection statute goes back to the assessment date." Recompute from the TC 150 date — or, for a later deficiency, the TC 290 or TC 300 adjustment date — not from when TC 488 itself was posted.

The default — TC 489 ends the suspension

If the IRC 6166 election defaults, IRM 5.5.7.6.2 states that "the statute suspension ends when the TC 489, Installment Defaulted, indicator is input on IDRS. The running of the statute resumes the day after the TC 489 date." The IRM’s own example: a TC 150 assessment of $300,000 on 9/20/2018, a TC 488 on 10/2/2018, and a TC 489 on 11/5/2020 suspends the statute across that entire span; the new CSED runs a full ten years from 11/6/2020, landing on 11/6/2030. See TC 489 for what actually causes that default and what it means for the client.

The practitioner’s actual next step

Confirm which form’s module this actually is before applying any rule from this page — a Form 706 account with an IRC 6166 election behaves nothing like a standard payment plan on an individual or routine business account, and this code cannot appear on a Form 1040 module at all.

If it is a Form 706 / IRC 6166 case, recompute the CSED using the suspension rule above — from the TC 150 (or TC 290/300) date to the TC 489 date, then ten years from the day after when all the tax was deferred (IRM 5.5.7.6.2.2 covers a partial election) — rather than assuming the clock ran the whole time the way it would on a standard agreement.

Ask the IRS about the corroborating IDRS history before concluding this is the IRC 6166 case rather than Doc 6209’s broader "manual billing" use: a payment-indicator flag restricting the account (shown on the module history as PYMT-IND>1), or a transaction-history entry reading "6166 SETUP," "To 6166," "Default 6166," or "950-H Letter." Doc 6209 also allows status 14 on Form 1120, 990-C, 990-T, 2290, and 4638 accounts under that broader "manual billing" heading, and no primary source located here confirms the same CSED-suspension treatment applies to those — verify the specific module rather than assuming it carries over.

For estate-tax specifics beyond the CSED mechanics, IRM 5.5.7.6.2 names Campus Estate & Gift and the Advisory Estate Tax Lien Group as the actual IRS contacts — not the Collection Appeals Program built for the standard Installment Agreement, which this code does not use.

What people mistake TC 488 for

TC 488 and the ordinary Installment Agreement — IDRS status 60, 61, 63, or 64 — look alike on a quick read, since both put a module into a non-collection holding pattern. They are unrelated programs with opposite CSED consequences: the ordinary agreement does not suspend the CSED (IRM 5.1.19.3.5(6)); TC 488’s IRC 6166 use suspends it entirely. Treating a TC 488 module like a standard payment plan produces a CSED that is wrong in the wrong direction — it understates how much collection time the IRS actually has left, the kind of error that surfaces years later when a "closed" account turns out not to be.

TC 488 and TC 530 (Currently Not Collectible) both remove a module from active collection, but for different reasons. TC 530 reflects an IRS determination that the taxpayer currently cannot pay anything. TC 488 reflects a deferral the estate (or business) affirmatively elected and qualified for under the Code — a materially different posture to explain to a client or executor.

TC 488 is also distinct from TC 489. TC 488 reflects the election or deferral in force. TC 489 — Doc 6209 §8A titles it "Installment Defaulted" — reflects that same deferral breaking down and the collection statute resuming. It follows a TC 488 rather than preceding one.