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IRS Installment Agreement

An Installment Agreement allows you to pay your tax debt over time through monthly payments. This is the most common resolution option and is available to most taxpayers who cannot pay in full.

Timeline

Streamlined agreements can be approved immediately online

Cost

Setup fees: $31 (online, direct debit), $107 (online, other), $225 (phone/mail)

Success Rate

Very high approval rate for those who qualify

Key Takeaways

  • Pay tax debt over time in monthly installments
  • Very high approval rate for debts under $50,000
  • Can be set up online in minutes
  • Interest and penalties continue to accrue

Best For

  • Taxpayers with steady income who can afford monthly payments
  • Those who owe less than $50,000 (streamlined process)
  • People who want to avoid more aggressive collection actions
  • Those who need time but can eventually pay in full

Requirements

  • 1
    All required tax returns must be filed
  • 2
    Must be able to pay the debt within the collection statute (usually 72 months max)
  • 3
    Cannot be in default on a previous installment agreement
  • 4
    Must agree to pay via direct debit for certain agreements

The Process

1

Determine Amount

Calculate your total tax debt including penalties and interest.

2

Choose Agreement Type

Select streamlined, regular, or partial payment installment agreement based on amount owed.

3

Apply

Apply online, by phone, or by mail using Form 9465.

4

Setup Payments

Set up automatic payments from your bank account.

5

Make Payments

Make all payments on time and stay current on future taxes.

Advantages

  • Available to most taxpayers
  • Quick approval for streamlined agreements
  • Stops wage garnishments and bank levies
  • Can be set up online for debts under $50,000
  • Flexible payment amounts based on ability to pay

Disadvantages

  • Interest and penalties continue to accrue
  • Tax lien may still be filed
  • Must stay current on future taxes
  • Setup fees apply ($31-$225 depending on type)
  • Defaulting restarts collection activity

Frequently Asked Questions

What is a streamlined installment agreement?
If you owe $50,000 or less (including penalties and interest) and can pay within 72 months, you can qualify for a streamlined agreement with no financial statement required.
How much will my monthly payment be?
At minimum, your total debt divided by the remaining months on the collection statute (max 72 months). For larger debts, the IRS may require higher payments based on your income and expenses.
Can I change my payment amount?
Yes. If your financial situation changes, you can request to modify your installment agreement. The IRS will review your finances and may adjust the payment amount.
What happens if I miss a payment?
Missing payments can result in default. The IRS will typically send a notice before terminating the agreement. Contact them immediately if you cannot make a payment.

Is Payment Plan Right For You?

Use our free tools to see if you qualify and estimate your potential outcome.

Take the Quiz

Other Options

OIC

Taxpayers who cannot pay their full tax liability

CNC Status

Taxpayers experiencing severe financial hardship

Penalty Relief

First-time penalty situations (clean compliance history)

Details

Timeline

Streamlined agreements can be approved immediately online. Regular agreements may take 30-60 days.

Costs

Setup fees: $31 (online, direct debit), $107 (online, other), $225 (phone/mail). Low-income fee: $43 or waived.

Success Rate

Very high approval rate for those who qualify. Streamlined agreements under $50,000 are almost always approved.