__CONFIG_colors_palette__{"active_palette":0,"config":{"colors":{"62516":{"name":"Main Accent","parent":-1}},"gradients":[]},"palettes":[{"name":"Default Palette","value":{"colors":{"62516":{"val":"var(--tcb-skin-color-0)"}},"gradients":[]}}]}__CONFIG_colors_palette__
Tax Debt Relief

5 Easy Steps to Set Up an IRS Payment Plan



Advertiser Disclaimer - Some links on this page may pay us advertising fees.


Summary: From checking your tax balance to submitting forms, learn the exact steps to set up an IRS payment plan.

set up payment plan with IRS

Got an outstanding tax bill? You might benefit from a payment plan. The IRS has short-term and long-term plans available, which can help if you can’t pay your balance in full.

There’s another benefit:

With a payment plan, the IRS usually doesn’t start a collection action.

That means you can avoid wage garnishment or tax liens on bank accounts or property. 

I know you are here to set up payment plan with IRS.

Whew.

But you must be proactive.

That means you’ve got to make monthly installments on time, every time.

There’s a catch.

Setting up an IRS installment agreement isn’t free.

I can hear you now:

There are fees to set up an IRS payment plan?

Usually, yes.

credit knocks logo

No Money to Pay the IRS?

Get a free consultation with a tax relief expert to see if you qualify for the Fresh Start.

It's quick, easy, and free.

Unless you can pay your bill in full in 120 days or less, the fees are:

  • $31 to apply for automatic withdrawals online 
  • $107 to apply for automatic withdrawals by phone, mail, or in-person
  • $149 to pay with another method if you apply online
  • $225 to pay with another method if you apply by phone, mail, or in-person

As you can see:

Applying online and setting up automatic withdrawals is the cheapest option.

There’s another benefit.

If your payments are automatic, you don’t have to worry about missing a payment.

How to Set Up an IRS Payment Plan

Dealing with the IRS is stressful.

Plus, payment plans aren’t the best solution for everyone.

Quick Tip:

Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

But installment agreements are pretty easy to set up.

I'm going to tell you how to set up payment plan with IRS.

If you’re ready to kick your tax debt to the curb, here’s how to set up a payment plan.

Step 1: Get Up to Date on Your Tax Returns

The IRS won’t let you make payment arrangements until you’re up to date on filing your tax returns.

The problem is…

How can you find all that old financial and employment info?

This first step is a big reason people hire a tax professional.

The best tax debt relief company can take care of filing your past returns.

If you have tax debt, give yourself a break.  8% of all U.S. taxpayers are delinquent.  

Step 2: Check Your Balance

Before you pursue a payment plan, you must know what you owe.

This is another reason the IRS requires your tax returns are up to date. Otherwise, you won’t know what your balance is or which payment plans you qualify for.

Check old copies of your tax returns to see what your bill is.

set up payment plan with IRS

What if you don’t have copies of your taxes to look at?

Contact the IRS.

You can order a copy of your return online, by phone, or by mail.

Step 3: Pick a Payment Plan

When it comes to picking a plan, the IRS has a couple of options.

How can you pick?

Simple.

If you owe less than $100,000 and can pay your balance off in 120 days or less, the short-term payment plan is your best bet.

Need more time to pay? A long-term payment agreement can help. 

It gives you up to 72 months to pay off what you owe to the IRS.

credit knocks logo

Increase Your Credit by 100+ Points

In a recent study at Credit Knocks, we found that *48% of clients who used a credit repair company got a credit score increase of 100+ points.

Consultation is quick, easy, and free.

But wait.

There’s one more thing.

A long-term agreement is best if you owe less than $50,000.

If you owe more than that, it’s harder to qualify and you may have to submit additional documentation to the IRS.

Step 4: Apply for a Plan

Now that you know what you owe and have a payment plan picked out, it’s time to apply.

Visit the IRS payment plan application page.

You must create an account or log in to an existing IRS account.

But then…

You’ll have to confirm your identity.

Offer in Compromise Mistakes:


Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!  So be sure to ask an expert for help.

After all, you don’t want just anyone accessing your sensitive data.

Here’s the info you need:

  • Your name exactly as it appears on your tax return
  • Email address
  • Address from your most recent tax return
  • Date of birth
  • Tax filing status
  • Social Security Number or ITIN
  • How much you owe
  • Financial account number or mobile phone in your name

Without a bank account or a cell phone registered in your name, the process will take longer. The IRS will send an activation code to your address, and that can take five to 10 business days.

It is also possible to apply by mail. 

You fill out IRS Form 9465 and mail it to the IRS.

If applying by mail, you also need to fill out and send Form 433-F if you owe more than $50,000.

Keep in mind these are government documents.

If you don’t know what you’re doing and make a mistake, you could end up in serious trouble.

So, please…

Be careful.

And don’t hesitate to reach out to our #1 tax debt relief company, Optima Tax, for a free consultation if you need some help.

Step 5: Manage Your Payment Plan

Once the IRS approves your payment plan, you must follow the agreement. 

What if you don’t?

Well, it won’t be good.

credit knocks logo

IRS Writes Off Millions Yearly

See if you qualify for tax relief.  Get a free consultation with a tax relief expert to see if you qualify today.

It's quick, easy, and free.

According to Canopy Tax, “If the taxpayer misses a payment, then the IRS will have the authority to revoke the entire payment plan and go after the taxpayer for the full tax debt owed.” 

Whatever you do…

  1. Don’t miss a payment.
  2. File all your tax returns on time from now on.
  3. If you move, update your address using this form.

There’s one more thing:

The IRS will keep any refund you might receive from future tax returns until your balance is paid in full.

Can You Change Your Payment Plan?

Now that you have a payment plan in place, you have a few options.

As long as you keep paying on time, the IRS can give you some flexibility.

For instance, what if you want to change the due date of your installment payment?

Luckily, you can.

If you log in to your account, you can adjust the due date. Asking for more time to pay off the balance is an option, too.

Except for one thing:

You must pay off what you owe in 72-months or less.

But as long as you don’t take longer than 72-months to pay off the balance, there’s a good chance the IRS will let you revise your payment options.

Get a free second opinion!


amy beardsley

By Amy Beardsley

Amy is a personal finance expert and freelance writer and owner of Early Morning Money, She has bachelor degrees in business administration and legal studies, and her work has been featured on The Huffington Post, Money Tips, and many other personal finance publications. 


Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}