Note: To obtain this type of agreement, you must pay by direct debit or payroll deduction. You want to apply for an online payment plan, including a installment payment agreement (see online application for installment and other payment plans, later); or By approving your application, we agree that you pay the tax you owe in monthly instalments instead of paying the full amount immediately. In return, you agree to make your monthly payments on time. You also agree to comply with all your future tax obligations. This means that you must have enough source deductions or estimated tax payments for your tax liability for future years to be paid in full if you file your tax return on time. Your application for a instalment payment agreement will be rejected if no required tax return has been submitted. Any refund will be based on the one you owe. If your refund is applied to your balance, you will still have to pay your regular monthly payment. If you have an emergency – for example: you need your reimbursement to pay for basic living expenses such as rent, utilities or food, you should contact the Taxpayers` Defence Service. The Office of Management and Budget has asked federal agencies to charge user fees for services such as the instalment agreement program.
The IRS uses user fees to cover the cost of processing instalment payment agreements. If you do not select the check box on line 13c (and do not specify the information on lines 13a and 13b), indicate that you can but cannot make electronic payments by configuring a DDIA. Therefore, your user fee is not refundable after the conclusion of your instalment payment contract. If you believe you meet the requirements for low-income taxpayer status, but the IRS has not identified you as a low-income taxpayer, please refer to Form 13844: Application for Reduced User Fees for Payment Agreements PDF for advice. Applicants must submit the form to the IRS within 30 days of the date of their letter of acceptance of the instalment payment agreement to ask the IRS to verify their status. Internal Revenue Service PO Box 219236, Stop 5050 Kansas City, MO 64121-9236 We have added text that clarifies when the IRS can terminate the remittance agreement. See What happens if the taxpayer does not comply with the terms of the instalment agreement, later. Contact the IRS at 800-829-1040 (TTY/TTY 800-829-4059) or the number on the notice to discuss this option. If you find yourself in this situation, you should also consider submitting a compromise offer to pay your taxes instead of a payment agreement in instalments. The six-year rule: If you only owe personal income tax, you may generally be eligible for the six-year rule (6). You will need to provide financial information, but not provide proof of reasonable expenses.
You must stay informed of all filing and payment requirements, including penalties and interest on the tax payable, and pay the payment in full in six years (72 months) and under collection law – the time the IRS has to collect the amount you owe. You will be charged interest and a late payment penalty for all taxes that have not been paid by the due date, even if your request for payment in instalments is granted. Any interest and penalties will be charged until the balance has been paid in full. However, for more information, see section 653, IRS Notices and Invoices, Penalties and Interest Charges at IRS.gov/TaxTopics/TC653. To limit interest and penalties, file your tax return on time and pay as much tax as possible with your tax return or notice. All payments received under the Remittance Agreement will be applied to your account in the best interest of the United States. In the last 5 tax years, you (and your spouse if you file a joint tax return) have filed all tax returns in a timely manner and paid all income taxes due and have not entered into a instalment payment agreement on the payment of income tax. . As a general rule, if the total amount you owe is more than $25,000 but not more than $50,000, you must either (1) complete lines 13a and 13b and agree to make payments by direct debit, or (2) check boxes 14 to make your payroll payments and attach a completed and signed Form 2159, Payroll deduction contract. A payroll deduction contract is not available if you file Form 9465 electronically. On line 11a, enter the amount you can pay each month.
Make your payments as large as possible to limit interest and penalties. The fees will continue to apply until you pay them in full. If you have already entered into a instalment payment contract, this amount must represent the total amount of the proposed monthly payment for all your liabilities. If no payment amount is shown on line 11a (or 11b), a payment will be determined for you by dividing the balance due by 72 months. A reinstatement fee may apply if your plan is delayed. Penalties and interest will continue to accrue until your balance is paid in full. If you have received a letter of intent to terminate your payment contract, please contact us immediately. We usually won`t take enforcement action: a payment plan is an agreement with the IRS to pay the taxes you owe within an extended period of time. You should apply for a payment plan if you believe you can pay your taxes in full within the extended period. If you are eligible for a short-term payment plan, you will not be liable for a user fee. Failure to pay your taxes when they are due may result in the filing of a federal tax lien notice and/or IRS levy action. See Publication 594, The IRS Collection Process PDF.
Reduced user fees for certain installment payment agreements. Yes, there are several factors that could change the amount of your tax refund, resulting in a larger or lower refund than expected. If you can pay the full amount you owe within 120 days, you can avoid paying the fee to arrange a payment in instalments. You can request a short-term payment plan if you can pay in full within 120 days using the OPA request on IRS.gov/OPA or by calling the IRS at 800-829-1040. .
