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