You should apply for a payment plan if:. Short-term payment planYou can pay your tax debt within 180 days. You can request a short-term payment plan by phone, mail, in person, or online. There are two types of simplified installment agreements, depending on how much you owe and for what type of tax.
For both types, you must pay the debt in full within 72 months (six years) and within the deadline for the IRS to collect the tax, but you won't need to file a financial statement. You will need to provide financial information for this type of agreement to be established. In addition, your financial situation will be evaluated every 2 years thereafter until the collection period expires or the tax debt is paid in full, whichever comes first. Internal Revenue Service P.O.
Box 219236, stop 5050 Kansas City, MO 64121-9236 If you prefer to file by phone, call 800-829-1040 (individual) or 800-829-4933 (company), or the phone number on your bill or notice. The IRS sometimes rejects requests for payment plans; if this happens to you, you have the right to appeal. You must request an appeal within 30 days of the rejection by filing Form 9423, Request for Collection Appeals. Generally, the IRS will not take enforcement action while the installment agreement is pending and for an additional 30 days after the rejection or termination, giving you time to request an appeal.
In addition, the IRS will generally not take enforcement action while appeals are considering the case. For more information, see Publication 594, IRS Collection Process. Clinics for low-income taxpayers (LITC) are independent of the IRS and the TAS. LITCs represent people whose income is below a certain level and who need to resolve tax issues with the IRS.
LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information on taxpayer rights and responsibilities in different languages for people who speak English as a second language. Services are offered free of charge or for a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, List of Clinics for Low-Income Taxpayers.
The IRS recommends that taxpayers who can't pay their taxes in full act as quickly as possible. Tax bills can quickly accrue more interest and charges the longer they remain in effect. If you are a low-income taxpayer and agree to make direct debit payments (from a checking account), you qualify for an exemption from the installment agreement user fee. If you are unable to make the required minimum payment, you will receive instructions to complete Form 9465 (Request for an Installment Agreement) (PDF) and Form 433-F (Collection Information Statement) (PDF).
You want to apply for an online payment plan, including an installment agreement (see Requesting an installment agreement and other payment plans online, below); or. You must keep up to date with all filing and payment requirements, including penalties and projected interest on the tax debt, and pay the full amount in six years (72 months) and within the collection law, the time the IRS has to collect the amount you owe. If you can pay the full amount you owe within 120 days, you can avoid paying the fee to set up an installment agreement. If you don't meet the criteria for express installment agreements with guaranteed, simplified, or in-company trust funds, you can still apply for an installment agreement from the IRS.
Finally, if you exercise your right to appeal the rejection or termination of an installment payment agreement, the collection period is suspended when the appeal is pending until the date when the appealed decision becomes final. If you are a low-income taxpayer and agree to make electronic payments through a debit instrument by entering into an installment agreement with direct debit (DDIA), the IRS will not charge the user fees of the installment agreement. After an installment agreement is approved, you can submit a request to modify or terminate an installment agreement. For information on payment arrangements, installment agreements, and what happens when you don't take any steps to pay, see Publication 594, IRS Collection Process (PDF).
Taxpayers who are struggling should contact an IRS representative by calling the number on the notice of their agreement. The Office of Management and Budget has directed federal agencies to charge users fees for services such as the installment agreement program. In fact, the IRS reminds people who can't pay their federal taxes in full that they can resolve their outstanding obligations by entering into a monthly payment agreement. The IRS did not mail monthly proof of payment during the relief period due to the closure of IRS offices due to COVID-19. Most taxpayers will qualify to apply for a payment plan or installment agreement online without needing to call or write to the IRS.
However, an NFTL is generally not filed in conjunction with a guaranteed installment agreement or a simplified installment agreement, but it can occur in certain situations. . .