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. Direct Debit is required for balances over $25,000 for individuals and $10,000 for businesses.
Phone or Mail
You can call the IRS at 1-800-829-1040 (individuals) or 1-800-829-4933 (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.