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IRS Payment Plan Options


Fortunately, just because a taxpayer cannot pay what he or she owes to the IRS in full, does not mean that that person is out of luck. This is because the IRS offers a number of payment plan options, including both short and long-term installment agreements. We’ve included information about a few of those options below. Read on to learn more about the payment plan options for which you could qualify.

Short-Term Payment Plans 

Some taxpayers can pay off outstanding tax balances over time by signing up for a short-term payment plan. This payment plan is an option for taxpayers who owe less than $100,000 in combined tax, penalties, and interest. Those who qualify for this type of plan must pay off the amount they owe in 180 days or less and can do so:

  • Directly from a checking or savings account;
  • By paying online or over the phone; or
  • Via check, money order, or credit or debit card.

It’s important to note that taxpayers who sign up for a short-term payment plan will also need to pay penalties and interest that accrue on their tax debt until the balance is paid off in full.

Long-Term Payment Plans 

With long-term payment plans, or installment agreements, taxpayers must make monthly payments in a certain amount for up to 72 months. These payment plans, however, are only available to taxpayers who owe less than $50,000. Most taxpayers are encouraged to set up direct deposit, which eliminates the need to send a payment every month and lowers the chance of default. In fact, the IRS actually requires automatic bank withdrawal for unpaid balances between $25,000 and $50,000.

What Happens After Requesting a Payment Plan? 

Once a taxpayer applies for a payment plan, he or she will be protected from certain IRS actions. For instance, the agency is prohibited from levying a taxpayer’s property and its time to collect will be suspended while the application is pending. Even if the application is rejected, the collection period will be suspended for a month. Once a request for a payment plan has been approved, the taxpayer will need to make regular payments or risk defaulting on the agreement. How much a taxpayer has to pay will be dictated by his or her income and necessary living expenses. Coming up with a payment amount may require some negotiation with the IRS, although the agency does have strict guidelines by which it must operate.

Set Up a Free One-on-One Consultation Today 

For help determining whether you could qualify for an installment agreement or other IRS payment plan, please call CPA, former FBI Special Agent, and Florida IRS installment agreement lawyer Ronald Cutler, P.A. at 386-490-9949 or reach out to us via online message. We know how stressful it can be to owe a debt to the IRS and will use our experience and resources to help you pay off what you owe and move on with your life.