To get an IRS payment plan, apply through the IRS Online Payment Agreement tool and choose between a short-term plan that gives you up to 180 days to pay in full or a long-term installment agreement that spreads payments over as long as 72 months. The online application takes about 10 to 15 minutes, and if your tax debt (before penalties and interest) is $10,000 or less and you’ve filed on time for the past five years, federal law requires the IRS to approve your plan.
Pick the Plan That Fits What You Owe
The right option depends on your balance and how fast you can clear it.
Short-Term Plan (Up to 180 Days)
If you can pay the full balance within six months, this is the cheapest route. You qualify if your combined debt is under $100,000, and there’s no setup fee.1Internal Revenue Service. IRS Payment Plan Options – Fast, Easy and Secure2Internal Revenue Service. Apply Online for a Payment Plan Interest and late-payment penalties keep accruing until the balance hits zero.
Long-Term Installment Agreement (Up to 72 Months)
Need more time? Individuals who owe $50,000 or less in combined tax, penalties, and interest can apply for a monthly installment plan through the streamlined online application.1Internal Revenue Service. IRS Payment Plan Options – Fast, Easy and Secure If your balance exceeds $50,000, you’ll need to submit a financial disclosure so the IRS can evaluate your ability to pay. You can either set up automatic bank withdrawals or handle each payment yourself; the setup fees are lower with direct debit.
Guaranteed Approval Under $10,000
Most people don’t know this one exists. If your tax liability (not counting interest, penalties, and additions) is $10,000 or less, the IRS is legally required to approve your installment plan when all of the following are true: you and your spouse (if filing jointly) filed all required returns and paid all taxes owed for the previous five years, you haven’t had an installment agreement during that same five-year window, and you agree to pay the full amount within three years.3Office of the Law Revision Counsel. 26 USC 6159 – Agreements for Payment of Tax Liability in Installments The statute says “shall,” meaning the IRS has no discretion. If you check every box, approval is your right.
Business Plans
Businesses that owe $25,000 or less can apply for an in-business trust fund express installment agreement, which requires full payment within 24 months.4Internal Revenue Service. 5.14.1 Securing Installment Agreements – Exhibit 5.14.1-5 All prior tax returns must be filed, and the business must be current on tax deposits. Balances above $25,000 trigger a financial statement requirement.
Partial Payment Plan (You Can’t Pay the Full Amount)
When you genuinely can’t afford to pay the full balance before the IRS’s collection deadline expires, a partial payment installment agreement lets you pay what you can each month, even if the total won’t cover everything owed. The IRS requires a complete financial disclosure on Form 433-A or Form 433-B and generally expects you to have tapped any available equity in assets first.5Internal Revenue Service. Partial Payment Installment Agreements and the Collection Statute Expiration Date If the IRS decides you can pay more than you’re offering, expect a rejection.
What to Gather Before You Apply
Have these ready:
- Social Security Number or ITIN for both spouses if you filed jointly.
- Your current balance. Check your most recent IRS notice (a CP14 for an initial balance due, or a CP501 reminder) or log into your IRS online account.6Internal Revenue Service. Understanding Your CP14 Notice
- A realistic proposed monthly payment. For debts over $50,000, the IRS will check this against your financial disclosure.
- Bank routing (nine digits) and account numbers if you’re using direct debit.7Internal Revenue Service. Instructions for Form 9465
If your balance exceeds $50,000 for individuals or $25,000 for a business, you’ll need to submit a Collection Information Statement. Form 433-F is the standard version for most individual accounts, Form 433-A handles more complex situations like self-employment, and Form 433-B covers businesses. These require a thorough accounting of monthly income, assets, and living expenses. The IRS compares what you report to its own allowable expense standards, so inflated numbers get flagged.
How to Apply
Online (Fastest and Cheapest)
The IRS Online Payment Agreement tool is the fastest route. You’ll sign into (or create) an IRS online account, which requires identity verification through ID.me. That process involves uploading a photo of your driver’s license, state ID, or passport, then either taking a selfie or video-chatting with a live agent.8Internal Revenue Service. How to Register for IRS Online Self-Help Tools If you’ve already verified for another IRS tool, you won’t need to do it again.
Once inside, pick your plan type, enter your financial details, and choose a payment date that lines up with your paycheck. The system usually returns an immediate answer, either provisional approval or notice that manual review is needed.
By Mail
Send a completed Form 9465, plus any required financial statements, to the address in the form’s instructions.9Internal Revenue Service. About Form 9465, Installment Agreement Request Use certified mail with a return receipt for proof of delivery. The IRS pauses certain collection actions once your request is on file.
By Phone or In Person
Call the number on your IRS notice, or schedule an appointment at a local Taxpayer Assistance Center. Useful for complex situations, but setup fees are higher.
Setup Fees and the Low-Income Waiver
Short-term plans have no setup fee. Long-term installment agreements do, and the amount depends on how you apply and how you pay:
- Online, direct debit: $22
- Online, non-direct debit: $69
- Phone, mail, or in person, direct debit: $107
- Phone, mail, or in person, non-direct debit: $178
Applying online with automatic withdrawals is by far the cheapest option.10Internal Revenue Service. Payment Plans; Installment Agreements Reinstating a lapsed plan costs $10 whether you’re an individual or a business.2Internal Revenue Service. Apply Online for a Payment Plan
If your adjusted gross income is at or below 250% of the federal poverty level, the IRS waives the direct debit setup fee entirely. For non-direct debit plans, low-income taxpayers pay a reduced $43 fee, which is reimbursed once you complete all payments.11Taxpayer Advocate Service. National Taxpayer Advocate 2025 Purple Book – Improve Assessment and Collection Procedures
What Happens After You Submit
The IRS usually responds within 30 days. Returns filed after March 31 may take longer.7Internal Revenue Service. Instructions for Form 9465 An IRS employee may contact you for financial records that verify your proposed payment amount.
Approved requests trigger a notice confirming the agreement terms, the monthly payment, and the setup fee (which gets added to your balance). At that point the agreement is binding on both sides. If denied, the notice explains the reasons and your appeal options.
Keep making voluntary payments while you wait. The IRS won’t take collection action while your request is pending, but interest and penalties accumulate every day you carry a balance.10Internal Revenue Service. Payment Plans; Installment Agreements
Interest and Penalties Don’t Stop
A payment plan doesn’t freeze what you owe. The interest rate on unpaid taxes is the federal short-term rate plus 3%, adjusted quarterly and compounded daily. For the first quarter of 2026, that rate is 7%.12Internal Revenue Service. Quarterly Interest Rates
On top of that, the late-payment penalty normally runs 0.5% of your unpaid tax per month. Having an approved installment agreement cuts it in half, to 0.25% per month.13Internal Revenue Service. Failure to Pay Penalty That reduced rate is one of the concrete benefits of setting up a formal plan.
Both charges are calculated on the remaining tax balance, so they shrink as you pay down the debt. The IRS applies payments to tax first, then penalties, then interest.14Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges Any extra you can pay reduces the base both charges run on.
Staying in Compliance So the Plan Doesn’t Default
Getting approved is the easy part. The IRS requires that you remain fully tax compliant for the entire duration of your installment plan. That means filing every future return on time, paying any new taxes owed, and making estimated tax payments if applicable.15Internal Revenue Service. 5.14.1 Securing Installment Agreements Falling behind on the current year’s taxes is the single most common reason plans collapse.
Other default triggers include missing a monthly payment, providing inaccurate financial information, or failing to submit an updated Collection Information Statement when the IRS asks for one.16Internal Revenue Service. 5.14.11 Defaulted Installment Agreements If you’re going to miss a payment because of a temporary cash crunch, call the IRS before the due date. Proactive communication goes much further than silence.
When a plan defaults, the IRS sends a notice of intent to terminate. The reduced 0.25% penalty rate reverts to 0.5% per month, and collection actions like liens and levies can resume.10Internal Revenue Service. Payment Plans; Installment Agreements You can reinstate a defaulted plan online for $10, but only after you’ve fixed whatever caused the default.2Internal Revenue Service. Apply Online for a Payment Plan
If You’re Rejected or Can’t Afford Any Plan
A rejection isn’t the end of the road. The IRS must give you 30 days’ written notice before terminating an existing agreement, and the notice must explain why.3Office of the Law Revision Counsel. 26 USC 6159 – Agreements for Payment of Tax Liability in Installments During that window, the IRS generally won’t seize property or garnish wages.10Internal Revenue Service. Payment Plans; Installment Agreements
To appeal, file Form 9423 under the Collection Appeals Program within 30 days. An independent IRS Appeals officer reviews the case fresh, and collection is suspended during the appeal.17Internal Revenue Service. 5.14.9 Independent Review and Appeals
Two other programs exist when even a 72-month plan isn’t realistic. An offer in compromise lets you settle for less than you owe if the IRS agrees you can’t pay the full amount. Applying costs a $205 nonrefundable fee plus an initial payment, both waived for taxpayers who meet the low-income certification. You must be current on all required returns and estimated payments and not in an open bankruptcy.18Internal Revenue Service. Offer in Compromise Approval is not easy to get, but for taxpayers who genuinely can’t pay, it’s a real path.
Currently Not Collectible status is different. If paying anything toward the debt would prevent you from covering basic living expenses, the IRS can pause collection entirely. No payments are required. The debt doesn’t disappear and interest keeps running, but the IRS won’t pursue collection until your finances improve. You’ll need to file all required returns and submit Form 433-F or Form 433-A to prove hardship.19Taxpayer Advocate Service. Currently Not Collectible The IRS periodically reviews these accounts to see if your circumstances have changed.