Installment Agreement

An Installment Agreement is a formal arrangement with the IRS that allows you to pay your tax debt over time through monthly payments. This option is available when you cannot pay your tax liability in full immediately.

Types of Installment Agreements

Guaranteed Installment Agreement

For debts of $10,000 or less with specific qualifications

Streamlined Installment Agreement

For debts of $50,000 or less with minimal financial disclosure

Partial Pay Installment Agreement

When you cannot pay the full amount before the collection statute expires

Full Pay Installment Agreement

For larger debts requiring complete financial disclosure

Setup Fees and Costs

Setup fees range from $31 (online with direct debit) to $225 (phone/mail with other payment methods). Low-income taxpayers may qualify for fee waivers. Professional tax help can assist in determining the best payment arrangement for your situation.

Important Considerations

Interest and penalties continue to accrue until the debt is paid in full. You must stay current with all future tax obligations to maintain the agreement. Before entering into any agreement, it's wise to verify tax relief options to ensure you're choosing the best path forward.

Payment Methods

• Direct Debit: Automatic withdrawal from bank account (lowest fees)
• Payroll Deduction: Automatic deduction from wages
• Online Payments: Manual payments through IRS website
• Phone/Mail: Traditional payment methods (higher fees)

Examples

• A $25,000 tax debt paid over 60 months at approximately $417 per month
• A streamlined agreement for $40,000 with $556 monthly payments

Tips for Success

• Direct debit offers the lowest setup fees
• Pay more than the minimum when possible to reduce total interest
• Missing payments can result in default and immediate collection action