View our interactive tax map to see where you are in the tax process. It could help you navigate your way through the IRS.
If it’s from the IRS, the notice will have instructions on how to respond. If you want more details about your tax account, you can order a transcript. Also, review your notice or letter to see if there is a specific website link to visit for additional information. This is usually located at the end of the notice or letter.
If it’s from another agency, such as a state tax department, you’ll need to call that office for an explanation.
Review the tax debt to be sure you owe it. If you don’t believe you owe the tax, now is the time to talk to the IRS about it. If you’ve received an IRS notice, start by calling the number on the notice to discuss the amount you owe.
The IRS will only agree to an installment agreement if you’ve filed all your returns. Once you’ve entered into an agreement, you’ll have to pay all future taxes on-time or your agreement may default.
You may wish to consider other resources before setting up an installment agreement. Can you borrow from a financial institution or a family member to pay the balance? If so, it will probably cost you less money since the IRS charges you interest even though you’re on a payment plan. You may also avoid some penalties and associated interest, by paying the IRS sooner. Compare the costs for your situation.
You have the right to an agreement without submitting a financial statement if:
There are two types of streamlined installment agreements, depending on how much and what type of tax you owe. For both types, you must pay the debt in full within 72 months (six years), and within the time limit for the IRS to collect the tax, but you won’t need to submit a financial statement.
In this situation, you must have some ability to pay your taxes but can’t pay in full within the remaining time the IRS has to collect. The IRS may allow you to make payments until this collection period expires.
Contact the IRS at 800-829-1040 (TTY/TDD 800-829-4059) or the number on the notice to discuss this option. If you’re in this situation, you might also want to consider submitting an offer in compromise to settle your taxes instead of an installment agreement. You can apply for a partial pay agreement online or by mail.
If you don’t meet criteria for guaranteed or streamlined, you can still request an installment agreement from the IRS. You can request a routine installment agreement by calling the IRS or by mail, but not online. You will need to agree to pay the liability in full before the period for collecting the tax expires.
The IRS may ask you for supporting documents for your income, expenses, and other amounts you owe (for example, home and car loan payments, other obligations). The IRS publishes and uses national and local standards to determine allowable monthly expenses and arrive at the appropriate monthly payment. If you feel you should be allowed more than the standard amount, provide reasoning with your application.
Generally, if you only owe individual income tax, you may qualify for the Six Year Rule. You’d need to provide financial information but not proof of reasonable expenses. You must stay current with all filing and payment requirements, including projected penalties and interest on the tax debt, and fully pay the balance due in six years (72 months) and within the collection statute — the time the IRS has to collect the amount you owe.
If you can’t pay your debt in full within six years, you may be given up to one year to modify or eliminate excessive necessary expenses. By modifying or eliminating these expenses, you may be able to pay the liability, plus accrued interest and penalties, within the six-year limit.
If none of these options seems to fit your circumstances, you can call the IRS and discuss your situation.
The initial fee for setting up an installment agreement varies depending on the payment method you choose. These fees are subject to change and are listed on the Online Installment Agreement page.
Low-income taxpayers may be able to have the fee waived at the time of entering into the IA if they choose to pay by direct debit, or if not, they may be able to get the fee reimbursed once they meet the terms of the agreement.
Note: For an individual routine installment agreement, you also will need to submit a Form 433-F, Collection Information Statement.
The IRS does reject payment plans sometimes — if this happens to you, you have the right to appeal. You must request an appeal within 30 days by submitting Form 9423, Collection Appeals Request. The IRS is prohibited from taking enforcement action while the installment agreement is pending and for 30 days after rejection or termination, which gives you time to request an appeal.
If the IRS accepts your request for an agreement, be sure you follow the instructions and make your payments on time every month. Contact the IRS immediately if you can’t make a payment.
You need to know that even with an installment agreement, your future refunds will be applied to your tax debt until it is paid in full. This helps pay your taxes off as quickly as possible.
If you default, the installment agreement may be terminated, and the IRS may begin taking enforcement action. It’s important to select the agreement that meets your personal situation and allows you to make your payments every month and on time.
A common source of tax debt is due to under-withholding. If this is happening to you, consider revising your Form W-4, Employee’s Withholding Allowance Certificate, to avoid this problem in future years. If you’re self-employed, make your estimated tax payments throughout the year.