What Is Form 9465? IRS Installment Agreement Setup Fees and Defaults

IRS Form 9465 is the request you file to set up a monthly installment agreement when you cannot pay your federal tax bill in full. You propose a monthly payment amount and a due date between the 1st and the 28th, and if the IRS approves, you pay down the balance over time instead of facing immediate collection like wage garnishment or a bank levy.¹

Who Form 9465 Is For

The form is built for individuals. You can use it if you owe income tax on your personal return, if you may be responsible for a trust fund recovery penalty, or if you owe employment taxes tied to a sole proprietorship that has closed. If your business is still operating and owes employment or unemployment taxes, Form 9465 is not the right route; the IRS instructs you to call the number on your most recent notice.²

Two balance thresholds shape how the IRS treats your request:

If you owe $25,000 or less, you qualify for streamlined processing regardless of payment method.
If you owe between $25,001 and $50,000, you still qualify for streamlined processing as an individual or out-of-business sole proprietor, but you must pay by direct debit or payroll deduction.²

Balances above $50,000 can still be paid on installments, but the process is no longer streamlined. The IRS will generally ask for a Collection Information Statement on Form 433-F detailing your income, expenses, and assets so a revenue officer can evaluate what you can afford.³

Whatever you owe, you must have filed all required federal returns before the IRS will approve any installment agreement.⁴ And if you owe $10,000 or less in income tax (excluding interest and penalties), have filed and paid on time for the previous five years, have not used an installment agreement in that period, and can pay in full within three years, the IRS is required by law to accept your request.⁵

Consider a Short-Term Plan First

Before filing Form 9465, check whether you can clear the balance within 180 days. The IRS offers a short-term payment plan with no setup fee no matter how you apply.⁶ Interest and the failure-to-pay penalty still accrue during those months, but you skip the user fee tied to a formal installment agreement.

Form 9465 is the tool for longer plans. A streamlined installment agreement gives you up to 72 months to pay if your balance is $50,000 or less.² Dividing what you owe by 72 gives a rough floor for your monthly payment. Paying more each month cuts what you lose to interest over the life of the plan.

Filling Out the Form

The form asks for your name, address, and Social Security Number or ITIN, the total balance shown on your return or most recent IRS notice, the monthly amount you propose to pay, and the day of the month payments should be due. You can pick any date from the 1st through the 28th.¹

If you elect direct debit, you also provide your bank’s nine-digit routing number and your account number. Confirm those numbers with your bank rather than pulling them from a deposit slip, since the deposit-slip routing number can differ from the one used for electronic withdrawals.⁷

Payments can be made by direct debit, IRS Direct Pay, the Electronic Federal Tax Payment System, check, money order, or debit or credit card. Direct debit is the most reliable option because it removes the risk of a missed payment. It is also required, not optional, for individuals owing between $25,000 and $50,000 who want streamlined approval.⁸

Setup Fees

The IRS charges a one-time user fee when it approves your agreement. What you pay depends on how you apply and how you plan to pay:

Online application with direct debit: $22
Online application without direct debit: $69
Phone, mail, or in-person with direct debit: $107
Phone, mail, or in-person without direct debit: $178⁹

Applying online with direct debit is the cheapest path. The Online Payment Agreement tool at IRS.gov/OPA handles balances of $50,000 or less.⁴

Low-Income Fee Waivers

If your adjusted gross income is at or below 250 percent of the federal poverty guidelines, you qualify as a low-income taxpayer for installment agreement purposes. Low-income taxpayers who pay by direct debit have the setup fee waived entirely. Those who cannot use direct debit pay a reduced fee of $43, which may be reimbursed once the agreement is completed.⁶ The waiver or reduced fee is claimed on Form 13844. For a single filer in the 48 contiguous states, the 2025 income threshold is $39,125, with higher figures for larger households and for Alaska and Hawaii.¹⁰

Submitting the Form

You have two main ways to send in the request. Applying online through the Online Payment Agreement tool gets you an immediate approval or denial and the lower setup fee, provided your balance is $50,000 or less.⁴ If you file by mail with your original return, attach Form 9465 to the front of the return. If you have already filed or are responding to a notice, mail the form on its own to the service center listed for your area in the form instructions.¹¹

Mailed requests usually get a response within 30 days, though returns filed after March 31 can take longer to process.¹² Start making the payments you proposed while you wait; it demonstrates good faith and reduces what accrues.

What the Plan Costs You Over Time

An installment agreement does not stop interest or penalties. Both continue to build on your unpaid balance until it hits zero.⁶ For the first quarter of 2026, the IRS interest rate on underpayments is 7 percent per year, compounded daily.¹³

There is one meaningful discount. If you filed your return on time and have an approved installment agreement, the failure-to-pay penalty drops to 0.25 percent per month (or partial month) on the unpaid balance instead of the standard rate.¹⁴ Over a multi-year plan that adds up, but interest keeps running either way, so paying above the minimum shortens the tail.

Keeping the Agreement in Good Standing

Approval brings ongoing obligations. To stay in compliance:

Make every monthly payment on time. Even if the IRS applies a future refund to your balance, you still owe the scheduled payment.⁶
File all future returns on time, and adjust your withholding or estimated tax so that any new balance is paid when you file.²
Expect any federal tax refund to be applied to your outstanding balance rather than paid to you while the agreement is active.⁶

If You Default

Miss a payment or fall out of filing compliance and the IRS sends Notice CP523, “Notice of Intent to Levy and Intent to Terminate Installment Agreement.” The notice gives you 30 days to pay the past-due amount or contact the IRS before the agreement is terminated.¹⁵

Ignore that window and the IRS can terminate the agreement and resume full collection, including filing a federal tax lien or levying wages and bank accounts.¹⁵ If you bring the account current, the IRS can reinstate the agreement. The reinstatement fee is $89, reduced to $43 for low-income taxpayers and waived entirely if the reinstated plan uses direct debit.¹⁶ Setting up direct debit from the start is the simplest way to avoid this whole sequence.

Whether the IRS Will File a Tax Lien

An approved installment agreement does not automatically prevent a Notice of Federal Tax Lien. If you owe $10,000 or more and your plan does not meet streamlined or guaranteed criteria, the IRS generally files a lien. For taxpayers who qualify for streamlined or guaranteed agreements, a lien is usually not filed, though the IRS keeps the right to file in unusual situations such as dissipation of assets or pending bankruptcy.¹⁷ A lien attaches to your property and can affect your credit and your ability to sell assets, so the size of your balance and the pace at which you pay it down matter beyond just the monthly math.

1
Internal Revenue Service. Form 9465 – Installment Agreement Request
2
Internal Revenue Service. Instructions for Form 9465 (07/2024) – Section: General Instructions
3
Internal Revenue Service. Collection Information Statement – Form 433-F
4
Internal Revenue Service. Online Payment Agreement Application
5
Office of the Law Revision Counsel. 26 USC 6159 – Agreements for Payment of Tax Liability in Installments
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Internal Revenue Service. Payment Plans; Installment Agreements
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Internal Revenue Service. Form 433-D – Installment Agreement
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Internal Revenue Service. IRS Payment Plan Options – Fast, Easy and Secure
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Internal Revenue Service. Instructions for Form 9465 (07/2024) – Section: Installment Agreement User Fees
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Internal Revenue Service. Application for Reduced User Fee for Installment Agreements
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Internal Revenue Service. Instructions for Form 9465 (Rev. July 2024) – Section: Where To File
12
Internal Revenue Service. Instructions for Form 9465 (07/2024) – Section: Requesting an Installment Agreement
13
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
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Internal Revenue Service. Failure to Pay Penalty
15
Internal Revenue Service. Understanding Your CP523 Notice
16
eCFR. 26 CFR 300.2 – Restructuring or Reinstatement of Installment Agreement Fee
17
Internal Revenue Service. 5.12.2 Notice of Lien Determinations