Types of Payment Plans
Short-Term Payment Plan
Pay your balance in full within 180 days
Features:
- No setup fee
- Up to 180 days
- Online application
- Stops collection actions
Requirements:
- Owe $100,000 or less
- Filed all returns
- No other payment plans
Best For: Temporary cash flow issues
Long-Term Payment Plan
Monthly payments over more than 180 days
Features:
- Monthly payments
- Up to 72 months
- Direct debit available
- Prevents collection
Requirements:
- Filed all returns
- Owe $50,000 or less
- Agree to direct debit
Best For: Ongoing financial constraints
Partial Payment Plan
Pay less than the full amount owed monthly
Features:
- Reduced payments
- Based on ability to pay
- Reviewed every 2 years
- Collection protection
Requirements:
- Financial hardship
- Cannot pay in full
- Detailed financial disclosure
Best For: Severe financial hardship
How to Apply
1
Determine Eligibility
Check if you qualify based on your tax amount and filing status.
- All tax returns must be filed
- Cannot have an existing payment plan
- Must owe $100,000 or less for short-term plans
2
Calculate Payment Amount
Determine how much you can afford to pay monthly based on your income and expenses.
- Review your monthly budget
- Consider minimum payment requirements
- Factor in interest and penalties
3
Submit Application
Apply online, by phone, or by mail using Form 9465.
- Online application is fastest
- Phone applications available
- Mail applications take longer to process
4
IRS Review
The IRS reviews your application and may request additional information.
- Review typically takes 30-60 days
- May request financial documentation
- IRS may propose different terms
5
Agreement Approval
Once approved, you'll receive your payment plan agreement and start making payments.
- Set up automatic payments
- Make first payment on time
- Keep agreement in good standing
Fees and Costs
Setup Fees
Short-term payment plan:$0
Long-term (direct debit):$31
Long-term (other payments):$149
Low-income taxpayers:$43
Ongoing Costs
Interest rate:~8% annually
Failure to pay penalty:0.25% per month
Reinstatement fee:$89
Restructuring fee:$89
Important Tips for Success
Do's
- ✓ Set up automatic payments to avoid missed payments
- ✓ File all future tax returns on time
- ✓ Pay any future tax liabilities in full
- ✓ Keep your agreement in good standing
- ✓ Contact the IRS if you can't make a payment
Don'ts
- ✗ Miss payments without contacting the IRS
- ✗ File returns late or fail to file
- ✗ Accumulate new tax debt
- ✗ Ignore IRS correspondence
- ✗ Assume the agreement continues if you default