How to Set Up a Payment Plan with the IRS
Created by FindLaw's team of legal writers and editors | Last reviewed June 20, 2016
This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.
The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area.
If you can’t pay your tax bill on time, it’s possible to apply for what is known as an “installment agreement” with the IRS. If the IRS grants the application, the agency will establish a payment plan so you can make monthly installment payments to pay off your back taxes.
Before you apply for an installment agreement, however, you should consider finding an alternative source of funds to pay off your tax bill. This will help you avoid the penalties and interest that the IRS will charge for back taxes. Depending on the terms you can get from a financial institution, or the interest rate on your credit cards, it might save you money in the long run to pay your tax bill by credit card or take out a loan to cover your debt to the IRS.
If using an installment agreement to set up a payment plan still makes the most sense for your situation, there are a few things you should know before you submit your application:
- First, you must have filed all of the required tax returns. If you didn’t file a return for a tax year when you should have, the IRS will not set up a payment plan for you.
- Second, you should examine your financial situation to determine the largest monthly payment you can make. The minimum payment each month is $25, but you should try to pay off your back taxes as quickly as possible.
- Third, be aware that the IRS will apply any future tax refunds you receive to your outstanding tax bill.
You can file an application online if your individual taxes, penalties and interest are $50,000 or less. You can also call the phone number listed on your tax bill to start the application process. Finally, you can submit a paper application using Form 9465-FS, Installment Agreement Request. If your tax bill is over $50,000, you’ll also have to fill out and submit Form 433-F, Collection Information Statement.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.
Contact a qualified tax attorney to help you navigate your federal and/or state tax issues.