| Making monthly payments on the taxes you owe | | | | Taxpayers are advised to call the number on |
| may be easier and more doable than having to | | | | their notice or mail in requests Form 9465 |
| pay an outstanding tax bill in full. IRS | | | | and Form 433F, which can be found online. |
| installment agreements are payment plans | | | | |
| where taxpayers can pay taxes owed in small | | | | - If you are a taxpayer who has not received |
| increments instead of having to pay one | | | | a notice from the IRS, but has filed taxes |
| outstanding tax bill. Installment agreements | | | | and know that you owe money, you can still |
| do not exist without their drawbacks, | | | | set up a payment plan on current year returns |
| however. | | | | with the IRS using the Online Payment |
| | | | Agreement. |
| Expect interest and penalties with | | | | |
| installment agreements. Penalties include: | | | | After applying for an installment agreement, |
| | | | the IRS will send a written notification |
| - One-time fee of $105 or one-time fee of $52 | | | | stating whether the terms of your request |
| for payments deducted directly from bank | | | | have been accepted or if the request needs to |
| account | | | | be adjusted. |
| | | | |
| - Fee of $45 for reinstating agreements or | | | | Once an installment agreement is set up, |
| changing existing agreements | | | | installment payments as well as tax return |
| | | | payments should be made on time by direct |
| - Interest on tax not paid by its due date | | | | debit from a checking account, payroll |
| | | | deductions from wages, or by mail. Payments |
| - Late payment penalty for not paying the tax | | | | can also be made by check, credit card, |
| by the due date | | | | certified funds, electronic funds transfer, |
| | | | or cash in person. The IRS recommends either |
| If you find that an installment agreement may | | | | direct debit or payroll deductions to save |
| be worth the above fees, consider setting one | | | | postage and help ensure that payments are |
| up. Most taxpayers who owe $25,000 or less | | | | made on time and that your agreement will not |
| will qualify for an installment agreement. | | | | default. If you miss an installment payment, |
| | | | you should contact the IRS right away. A |
| - For taxpayers who owe $25,000 or less: | | | | missed installment payment could default your |
| Visit the IRS website and go to the Online | | | | agreement which could cause a Notice of |
| Payment Agreement (OPA) ( or call the phone | | | | Federal Tax Lien or IRS levy. Aside from |
| number on your notice that you owe money to | | | | causing financial burdens, both of these can |
| the IRS. Before doing these things, be sure | | | | negatively impact credit scores. |
| to have your social security number and the | | | | |
| notice with the amount owed readily | | | | If you already have an installment agreement, |
| available. Those not wanting to fill in the | | | | you may be able to restructure it so that |
| request on the website may mail in Form 9465, | | | | additional amounts can be combined with your |
| which can also be found on the IRS website. | | | | current agreement into a new agreement. |
| The request can be mailed to the address on | | | | |
| your notice. | | | | Keep in mind that if you are in an |
| | | | installment agreement with the IRS, tax |
| - Taxpayers who owe more than $25,000 may | | | | refunds owed to you will be applied to the |
| also qualify for an installment agreement. | | | | payment amount. The IRS will apply the refund |
| Form 433F, a Collection Information | | | | to amounts owed like taxes, student loans, or |
| Statement, might also need to be completed. | | | | child support. |