A payment plan is an agreement with the IRS to pay the taxes you owe within an extended period. You should apply for a payment plan if you think you'll be able to pay your taxes in full within the extended deadline. If you qualify for a short-term payment plan, you are not responsible for any user fees. If the requested installment agreement is rejected, the collection period is suspended for 30 days.
If the IRS determines that you cannot pay any of your tax debts due to financial difficulties, the IRS may temporarily delay the collection by stating that your account is currently not collectible until your financial situation improves. 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. An IRS payment plan is an agreement that you make directly with the agency to pay your federal tax bill for a specified period of time. If you default on missed payments, the installment agreement may be terminated and the IRS may begin taking enforcement action.
Installment agreements using direct debit and payroll deduction allow you to make timely payments automatically and reduce the possibility of default. You must keep up with all filing and payment requirements, including penalties and projected interest on the tax debt, and pay the full amount within six years (72 months) and within collection law, that is, the time the IRS has to collect the amount you owe. Installment direct debit agreements have a lower user fee compared to other installment agreements, and the user fee may not apply or be reimbursed to low-income taxpayers. 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 is pending.
If you are unable or choose not to use the online system, you can complete the paper IRS Form 9465, application for an installment agreement, and send it with all required documents to the address listed in the instructions. The initial fee for setting up an installment agreement varies depending on the payment method you choose. If you are unable to make the required minimum payment amount, you will receive instructions to complete Form 9465 Request for Installment Agreement in PDF and Form 433-F Collection Information Statement in PDF. 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.
A request for an installment agreement is usually pending until it can be reviewed and an installment agreement is established, or the request is withdrawn or denied. A request for an installment agreement is usually pending until it is reviewed and established, or you withdraw the request or the IRS rejects it. You can request a routine installment agreement by mail or by calling the IRS, but you can't apply online.