Options could include reducing your monthly payment to reflect your current financial situation. You may be asked to provide proof of changes in your financial situation, so have that information available when you call. After receiving notice of termination of your installment agreement, the IRS will grant you 60 days to file an appeal challenging the intention to rescind the agreement. While those 60 days are pending, the IRS cannot take any tax action against you.
If you file an appeal, the IRS cannot make any execution while the appeal is pending. Protections against garnishment during an appeal of an unfulfilled installment agreement are law and can be found in Internal Revenue Code 6331 (k) (. If you don't qualify for an online payment plan, you can also apply for an installment agreement (IA) by submitting Form 9465, Request for Installment Agreement in PDF, to the IRS. Pay by direct debit (automatic monthly payments from your checking account), also known as an installment direct debit agreement (DDIA).
Applicants must submit the form to the IRS within 30 days from the date of their letter of acceptance of the installment agreement to ask the IRS to reconsider their status. When you apply for a payment plan (installment agreement), with certain exceptions, the IRS is generally prohibited from collecting taxes and the IRS's time to collect is suspended or extended while an installment agreement (IA) is pending. This time also allows taxpayers to recover from financial setbacks instead of making installment payments. If the IRS system identifies you as a low-income taxpayer, the online payment agreement tool will automatically reflect the applicable rate.
If you are a low-income taxpayer but are unable to make electronic debit payments when you sign up for a DDIA, your user fee will be refunded once you complete the installment agreement. File all required tax returns on time and pay all taxes in full and on time (contact the IRS to change your current agreement if you are unable to do so). If you are a low-income taxpayer, you will not be charged the user fee if you agree to make direct debit payments through an installment direct debit agreement (DDIA). Taxpayers who don't qualify for an online payment agreement may still be able to pay in installments.
You can enter into an installment agreement by calling the IRS, online, or mailing the necessary forms. Submit your request online through the online payment agreement tool or by phone or by mail by submitting Form 9465, Request for an Installment Agreement. If you're not eligible for a payment plan through the online payment agreement tool, you may still be able to pay in installments.
