Don’t panic – you may qualify for an online payment plan (including an installment agreement) that allows you to pay off your outstanding balance over time. Once your online application is complete, you will receive immediate notification if your payment plan has been approved without having to call or write the IRS. Online payment plans are processed faster than applications submitted with electronically filed tax returns, even if the new tax has not yet been assessed.
Online payment plans include:
- Short-Term Payment Plan: The payment period is 120 days or less and the total amount you owe is less than $100,000 in taxes, penalties, and interest combined.
- Long-Term Payment Plan: The payment period is greater than 120 days, paid in monthly payments, and the amount you owe is less than $50,000 in taxes, penalties, and interest combined.
If the IRS approves your long-term payment plan (installment agreement), a setup fee may apply depending on your income.
If you already have a payment plan, you may also qualify to use the online payment plan option to review your existing agreement. Changes you can make online include verifying payment dates, payment amounts, and bank information for direct debit installation agreements.
If you don’t qualify for an online payment plan, you can also request an installment agreement (IA) by submitting Form 9465, Application for Installment AgreementPDF, with the IRS. If the IRS approves your IA, a setup fee may apply based on your income. See Tax Topic 202, Tax Payment Options.
If you apply for an IA, the length of time the application is pending delays or suspends the execution of the initial ten-year collection period. An IA request is often pending until it can be reviewed and an IA is established, or the request is withdrawn or denied. If the requested IA is rejected, the computation of the collection period is suspended for 30 days. Similarly, if you default on your IA payments and the IRS proposes to cancel the IA, the collection period is suspended for 30 days. Finally, if you exercise your right to appeal either an IA denial or termination, the collection enforcement period is suspended from the time the appeal is pending until the date the appealed decision becomes final. see Tax Topic 160, Statutes Expiration Date.