What is a payment plan?
A payment plan is an agreement with the IRS to pay the taxes you owe within an extended timeframe. You should request a payment plan if you believe you cannot pay your taxes in full within the extended time frame. Below are a few important reminders:
- Interest and penalties will continue to accrue on your balance while you are in a payment plan.
- If you default on your payment plan, the IRS may take collection action.
- It's important to be honest and accurate when applying for a payment plan. The IRS will review your financial situation to determine if you qualify and what amount you can afford to pay.
How to set up a payment plan with the IRS
Online Payment Agreement (OPA)
This is the fastest and easiest way for most individuals to set up a short-term (up to 180 days) or long-term (up to 72 months) payment plan. You can use the OPA tool on the IRS website: https://www.irs.gov/payments/online-payment-agreement-application. Here's what you need to know:
- Eligibility: You can use the OPA if your total balance (tax, penalties, and interest) is less than $50,000 for short-term plans and less than $100,000 for long-term plans.
- Fees: After your tax return is filed, long-term plans set up online incur a $52 fee, and short-term plans set up online incur a $29 fee.
- Payment methods: You can pay by Direct Debit or check/money order. A direct debit is required for balances exceeding $25,000 for individuals and $10,000 for businesses.
Phone or Mail
You can contact the IRS at 1-800-829-1040 (for individuals) or 1-800-829-4933 (for businesses) to discuss your payment plan options and apply over the phone.
If you don't qualify for the OPA or prefer a different approach, you can submit Form 9465, Installment Agreement Request, along with a completed Form 433-F, Collection Information Statement (if required). You can mail the forms to the IRS or submit them by phone.
How long does it typically take for the IRS to process my payment plan request?
If you apply through the Online Payment Agreement (OPA) portal, you will generally receive immediate confirmation of your payment plan. If you apply by phone or mail, processing times may vary; however, the IRS typically responds within 30 days of receiving your application.