Payment Plans, Installment Agreements
You can make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately. However, you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full. Before you apply:
- File all required tax returns;
- Consider other sources (loan or credit card) to pay your tax debt in full to save money;
- Determine the largest monthly payment you can make ($25 minimum); and
- Know that your future refunds will be applied to your tax debt until it is paid in full.
Fees for setting up an installment agreement:
- $52 for a direct debit agreement;
- $105 for a standard agreement or payroll deduction agreement; or
- $43 if your income is below a certain level.
Apply for an installment agreement
- Apply online if you owe $50,000 or less in combined individual income tax, penalties and interest;
- Call the phone number on your bill or notice;
- Complete and mail Form 9465-FS, Installment Agreement Request (PDF). If you owe more than $50,000, you will also need to complete Form 433-F, Collection Information Statement (PDF).
Understand your agreement, avoid default
To keep your account in good standing:
- Pay at least your minimum monthly payment when it's due (direct debit or payroll deductions make this easy);
- Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
- File all required tax returns on time;
- Pay all taxes you owe in full and on time (contact us to change your existing agreement if you cannot);
- Continue to make all scheduled payments even if we apply your refund to your account balance; and
- Ensure your statement is sent to the correct address, contact us if you move or complete and mail Form 8822, Change of Address (PDF).
If you don't receive your statement, send your payment to the address listed in your agreement.
There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact the IRS immediately. The IRS will generally not take enforced collection actions:
- When an installment agreement is being considered;
- While an agreement is in effect;
- For 30 days after a request is rejected, or
- During the period the IRS evaluates an appeal of a rejected or terminated agreement.
Pub. 594: IRS Collection Process
Explains the actions IRS may take to recover taxes owed. Download Pub. 594 (PDF)
