An IRS installment agreement is a monthly payment plan with the IRS when you have tax debt and can’t pay in full. You need to keep in mind that even though you set up an IRS installment agreement, penalties and interest will continue to accrue on any outstanding tax debt, just like a credit card. Also, once an installment agreement is set up, if you subsequently file a tax return with tax debt, and do not pay by the due date, your installment agreement will go into default. An IRS installment agreement can not be set up until all required tax returns have been filed.
There are several types of IRS installment agreements and the following are the qualifications, fees and methods to set each of them up.
Automatic Installment Agreement
- Taxpayer owes less than $10,000
- Taxpayer has not owed or had an IRS installment agreement for the past 5 years
- Taxpayer agrees to pay the total amount owed within 3 years
How to file an IRS automatic Installment Agreement:
- Online – IRS Website
- File form IRS Form 9465
- By Phone - 800-829-1040
Streamline Installment Agreement
- Taxpayer owes less than $50,000
- Taxpayer has not owed or had an IRS installment agreement for the past 5 years
- Taxpayer agrees to pay the total amount owed within 72 months or before the Collection Statue Expiration Date (“CSED”), whichever is first
How to file an IRS Streamline Installment Agreement:
- Online – IRS Website
- File form IRS Form 9465
- By Phone - 800-829-1040
Regular Installment Agreement
If you do not qualify for the automatic or streamline IRS installment agreement, either because you owe more than $50,000 or you can’t repay your tax debt within 72 months, then you will need to set up a regular installment agreement. In order to set up a regular IRS installment agreement you will need to do the following:
- Complete an IRS Form 433
- Call the IRS to set up the installment agreement - 800-829-1040
Partial Pay Installment Agreement
The IRS partial pay installment agreement follows the exact same procedures as the regular installment agreement however the main difference is that your monthly payment will not pay off the tax debt by the collection statute expiration date. Because of this, the IRS will revisit your case within 18 months or so to see if you can afford a higher monthly payment.
IRS Installment Agreement FEES:
Fees for an IRS Installment agreement when applying online:
- $149
- $43 without direct debit and if taxpayer can meet the low-income threshold
- $31 with direct debit
- $0 with direct debit and if taxpayer can meet the low-income threshold
Fees for an IRS Installment agreement when NOT applying online:
- $225
- $43 without direct debit and if taxpayer can meet the low-income threshold
- $107 with direct debit
- $0 with direct debit and if taxpayer can meet the low-income threshold
Penalties and interest will continue to accrue on any outstanding balance, just like a credit card.
If you need help with your tax debt and getting set up with an IRS Installment Agreement, feel free to reach out to us at EA Tax Resolutions in Orange County, CA. We provide an honest tax help service with upfront fees.
800-245-0596
4630 Campus Dr #203
Newport Beach, CA 92660
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