IRS Installment Agreement

Can You Pay Within 120 days?

If you can pay the full amount of taxes you owe within 120 day, call 1-800-829-1040 to establish your request to pay in full (or apply online). If you can pay the full amount within 120 days, you can avoid the fee (see below) for setting up an installment agreement.

Form 9465, Installment Agreement Request

If you need more than 120 days to pay the full amount of your tax liability, you can set up an installment agreement. Attach Form 9465 to the front of your tax return. You should know within 30 days after the IRS receives your request whether it is approved. If your request is for tax due on a return filed after March 31, it could take longer to hear from the IRS.

Your request will be denied if all required tax returns have not been filed.

If you owe less tan $50,000, you may be able to establish an installment agreement online. Go to irs.gov to check this out. If you owe more than $50,000, you must complete Form 433-F and attach it to your request.

If you fail to make your payments according to your agreement, you will be in default of your agreement and the IRS may take enforcement action.

IRS Fees

If the IRS approves your request, they will send you a notice detailing the payment arrangement and request a fee of $105. The $105 fee applies if you make your installment payments by check, money order, or credit card. However, the fee is $52 if you make your installment payments via electronic funds transfer (EFT).

The fee may be reduced to $43 if you have income below a certain level. The IRS will let you know if qualify for the reduced fee. If the IRS does not say that you qualify for the reduced fee, you can request the reduced fee by using Form 13844, Application For Reduced User Fee For Installment Agreements

If you pay by credit card there may be a convenience fee.

Interest and Penalties

You're required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month, after the due date that the tax is not paid. If you don't file the return by the due date, including extensions, you may have to pay a failure-to-file penalty.

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