How To Set Up An Installment Agreement With The Irs

If you can't pay your taxes, one pick might be an IRS payment plan — if you know the rules.

What is an IRS payment plan?

An IRS payment programme is an agreement you make directly with the bureau to pay your federal tax bill over a certain amount of time. There are two kinds of IRS payment plans: brusque-term and long-term.

Typically you lot'll brand monthly payments to settle what you owe. So long equally you're keeping up with that, the IRS unremarkably won't garnish your wages or seize whatever bank accounts or property. Merely getting on an IRS payment plan doesn't get you out of interest and penalties for tardily payment; those accrue until your balance is zero.

Who is eligible for an IRS payment plan

You don't need to call the IRS to get on a payment plan. You tin can apply online if either of these situations apply to y'all:

Yous're applying for a long-term payment programme, you owe $50,000 or less in combined tax, penalties and involvement, and you lot've filed all your tax returns.
You're applying for a brusk-term payment plan and you owe less than $100,000 in combined revenue enhancement, penalties and involvement.

Yous'll need to ostend your identity, which means having the following information on hand:

Name exactly as information technology appears on your most recently filed tax return.
A valid email accost.
Address from your most recently filed revenue enhancement return.
Date of birth.
Filing status.
Your Social Security number or Individual Tax ID Number.
Balance due amount.
Financial account number, mobile telephone registered in your name or an activation code received past mail (takes five to ten business organisation days).

Hither'southward a potential timesaver: If you lot've previously registered for a tax transcript , Identity Protection Pivot or some other online payment agreement, yous probably can log in with the aforementioned user ID and password.

Or you can fill out IRS Form 9465 and mail it to the IRS.

Minimum monthly payments for IRS payment plans

In general, you tin can choose what yous pay every month. That is, the IRS will ask you what y'all tin can afford. However, if you're on a long-term payment plan, you lot must cull a payment amount that will pay off your debt inside 72 months.

What are the fees for an IRS payment plan?

The cost of an IRS payment plan depends on which programme you choose, how you employ for the program and whether you authorize for a fee reduction.

Payment program type	Maximum you tin owe to qualify	Setup fee & payment methods
Brusk-term payment plan (120 days)*	$100,000 in combined revenue enhancement, penalties and involvement.	$0 to apply online , by telephone, by mail service or in person. Pay balance by: Withdrawals from your checking account or savings account (Straight Pay) or Check, money lodge or debit/credit card.
Long-term payment plan (120 days or more)**	$50,000 in combined tax, penalties and interest.	If you pay through automated withdrawals: $31 to apply online. $107 to apply past phone, mail or in person. If y'all pay by some other method: $149 to apply online. $225 to apply past telephone, mail or in person.
* Taxpayers tin can too apply for an extended brusque-term payment plan of upwards to 180 days by contacting the IRS by phone or mail.
** For depression-income applicants, setup fees for automatic withdrawals can be waived, and setup fees for other payment methods can be reduced to $43 or reimbursed in certain circumstances.

Y'all may qualify equally a low-income applicant if your adapted gross income is at or below 250% of the federal poverty level. (See if you qualify on IRS Form 13844.) If you're a low-income taxpayer, the IRS waives the user fee if you agree to let information technology make automatic withdrawals from your banking company account for the payments. If you lot qualify as a low-income taxpayer but are unable to brand electronic debit payments, the IRS will reimburse you for the user fee when you pay off your remainder.
If you make your payments with a debit or credit bill of fare, you lot'll have to pay a processing fee. The charge for debit cards runs almost $two to $4 per payment; the charge for credit cards is nigh 2% of the payment.
If you owe more than $25,000, you accept to brand your payments via automatic withdrawals from a banking concern account ("straight debit").

Making changes to an IRS payment plan

The IRS offers an online tool that lets you lot alter your monthly payment corporeality, modify the monthly due date, sign upwards for automatic withdrawals and reinstate a payment plan you've fallen behind on. Nevertheless, that works just if you're not making payments through straight debit.

If you're on a plan where the payments are coming out of your bank account automatically, yous have to contact the IRS direct.
There might be a reinstatement fee if your plan goes into default.

Can I employ for an IRS payment plan myself?

Yes. You are not required to pay a third party to apply for a payment plan.

If you do hire a tax-relief company to help yous settle your debt, you may have to requite it power of attorney to employ for an IRS payment program on your behalf. And proceed with circumspection, as the Federal Trade Commission warns on its website.

"The truth is that about taxpayers don't qualify for the programs these fraudsters militarist, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don't provide refunds, and exit people even further in debt," it states.

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