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Guide to Tax Installment Agreements (Payment Plans)

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What is an installment agreement?

An installment agreement is a plan taxpayers make with the IRS to pay their taxes in monthly installments instead of in one lump sum.

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What is a 'payment plan'?

For IRS purposes, a payment plan simply is another name for an installment agreement.

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Am I eligible for an installment agreement?

In order to be eligible for an installment agreement, you must have filed a tax return, and also be up-to-date on your tax payments. Installment agreements are designed for those who cannot pay in one lump sum.

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How do I set one up?

To send up an installment agreement, you should file IRS Form 9465 (Installment Agreement Request) along with your tax return, or you can call 800-829-1040.

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When will I find out if my plan has been approved?

You should find out whether or not you have been approved for an installment agreement within 30 days.

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What are the benefits?

The purpose of an installment agreement is for a borrower to be able to pay his or her taxes in monthly payments instead of all at once. This is the main benefit.

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What are the costs?

The costs of an installment agreement are exactly that – costs. There is an initial $43 set-up fee, as well monthly fees and interest compounded daily throughout an agreement. While it may be easier to make partial payments rather than to pay in full, taxpayers with installment agreements end up paying much more in long run.

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