If you’re in debt with the IRS, you might wonder if you need a tax professional to help you set up an installment agreement. Is it too hard to set up an IRS payment plan on your own? For a lot of people, setting up an IRS Installment Agreement can be done with no professional help. However, there are some cases where hiring a pro to help you can make a big difference in how quickly and smoothly your situation gets resolved.

We’ll cover the basics of Installment Agreements, how to decide if you can handle one yourself, when professional assistance from a tax attorney is worth it, and how tax professionals can help you avoid costly mistakes.

Key Takeaways

  • An IRS Installment Agreement lets you pay off your tax debt over time while avoiding aggressive collection action.
  • If you owe less than $50,000, you can probably set up a simple payment plan on your own.
  • If your balance is over $50,000, or you have unfiled returns, financial hardships, or active collections, a professional may protect you from mistakes and help you negotiate better terms.
  • Tax professionals can help determine if other options, like penalty abatements or Offer in Compromis, would save you more money.

What is an IRS Installment Agreement?

The IRS understands that not all taxpayers can pay their tax bill on time. To make repayment manageable, the IRS offers Installment Agreements that allows people to pay their tax debt over time. You’ll still face penalties and interest, but the Installment Agreement does make it so the IRS won’t come knocking on your door looking for the money you owe.

You’ll be able to avoid liens, levies, and garnishments because you were able to strike a deal to pay the IRS back in manageable payments.

You can set up payments with the IRS’s Online Payment Agreement tool if you owe less than $50,000 and can pay that amount in under 120 months (and before the Collection Statute Expiration Date, or CSED). The online tool will walk you through the process and will let you know right away if your payment plan is accepted.

The IRS offers a few different types of payment plans, and if you owe over $50,000, you can’t apply online.

IRS Payment Plan Options
Type Who Qualifies Requirements Advantages
Guaranteed Installment Agreement Owe $10,000 or less Filed and paid all taxes for last 5 years
Can fully pay in three years		 Typically automatic approval
No financial statement
Simple Payment Plan Owe less than $50,000 All returns filed
Repayment within 10 years or by the CSED		 Quick setup online
No in-depth financial review
Non-Streamline Installment Agreement Owe over $50,000 Returns filed
Repayment by the CSED
Financial statement required if requested by IRS or if you owe over $250,000		 May allow you to set up payments if you don’t qualify for other options

When Hiring Help May Not Be Necessary

If your situation is simple, you probably don’t need to hire a tax professional to set up your Installment Agreement.

You can likely do it yourself if:

  • You owe $50,000 or less in total tax, penalties, and interest.
  • All required tax returns have been filed.
  • You can pay the balance off within 120 months.
  • You have a plan to stay compliant with future tax obligations.
  • The IRS hasn’t issued any liens, levies, or wage garnishments against you.
  • You’re comfortable handling communication with the IRS online or by mail.

In those cases, you can log in to the IRS website, select “Set Up a Payment Plan,” and complete the process in about 30 minutes. The site will calculate your minimum payment and, once approved, automatically withdraw monthly payments from your account.

However, while these straightforward cases can be handled independently, many taxpayers have situations that don’t fit neatly into the simple categories. That’s where professional guidance can make a big difference.

When You Should Call the Pros

What if your tax debt exceeds $50,000? You aren’t out of luck, but you’ll have to jump through a few hoops to set up a payment arrangement.

Here are the most common situations where hiring a tax professional is a good idea:

    • Balances Over $50,000: You’ll need to file Form 9465, Installment Agreement Request, instead of applying online. You might also need to send in a Form 433-F, Collection Information Statement, as well, giving the IRS information about you, your spouse, and assets that you have.
    • Inability to Pay the Minimum Required Amount: If you can’t afford the minimum payment needed to pay off your balance before the CSED, a tax professional can negotiate an alternative like a Partial Payment Installment Agreement (PPIA) or review whether you qualify for Currently Not Collectible (CNC) status or a potential settlement through an IRS Offer in Compromise.
    • Multiple Unfiled Tax Returns: The IRS won’t approve an installment Agreement until all returns are filed. A professional can help you get caught up quickly and correctly.
    • Active Collections Actions: If you’re facing or worried about the loss of your passport or a garnishment, lien, or levy, representation is essential to protect your income and assets.
    • Need for Penalty Relief or Additional Options: A professional may advise whether you qualify for penalty abatement or an Offer in Compromise.
    • Business Debts or Payroll Issues: Business tax cases often involve additional rules and documentation that can require professional expertise.
    • Rejections or Terminations: A pro can help you through the appeals process if your installment agreement is rejected or terminated.
  • Modifications to Existing Payment Plan: If you’re already on an IRS payment plan but need to reduce your payment or add an additional tax liability, you may want to talk with a pro. A pro can also help if you want to switch from a payment plan to an alternative, such as a PPIA or CNC. 

In these situations, working with a tax professional isn’t just about making the paperwork easier. A pro can help you safeguard your rights and ensure the final agreement is truly workable.

Risks of Going it Alone

Many taxpayers assume that working directly with the IRS is always faster or cheaper. However, setting up a plan without understanding the implications can lead to problems.

  • Agreeing to payments you can’t afford. Defaulting on an agreement can restart the collections process.
  • Not reviewing all available options. Some taxpayers settle for a plan when they might qualify for a reduced payoff through an Offer in Compromise or penalty relief.
  • Incorrectly filling out forms. Errors on Form 9465 or Form 433-F can delay approval or lead to incorrect payment calculations.
  • Failing to address unfilled returns or updated income changes. New debts can cause the IRS to cancel your existing agreement.

While none of these mistakes are egregious, they can make a stressful situation worse and sometimes more expensive in the long run.

How Tax Professionals Negotiate with the IRS

Tax professionals like attorneys or CPAs know the IRS’s procedures and what the agency considers acceptable when evaluating a payment plan request.

They can help you:

  • Propose realistic monthly payment amounts that you can afford while meeting IRS requirements.
  • Prepare supporting documentation that clearly shows your ability (or inability) to pay, minimizing the back-and-forth with the IRS.
  • Avoid default by designing a sustainable long-term plan based on your actual financial capacity.
  • Communicate directly with the IRS so you don’t have to. Your representative can make phone calls, submit documents, and handle correspondence on your behalf.
  • Explore alternative resolutions, ensuring that entering into an installment agreement is truly your best option.

Professionals look at your case as a whole and consider penalty reductions, asset protection, and even future compliance steps to create a more stable financial outcome.

Benefits of Professional Representation

Beyond practical assistance, there’s emotional relief that comes along with having professional support. Knowing someone is handling your case can bring considerable peace of mind. Key benefits include:

  • Reduced IRS contact: Once you authorize representation, the IRS communicates directly with your professional.
  • Preventing enforcement actions: A tax attorney can request holds on collections while your application is under review.
  • Proper sequencing of solutions: Sometimes, applying for one program before another can influence the success of your agreement.
  • Better negotiation leverage: Experienced professionals understand IRS thresholds and can often secure more favorable terms or payment flexibility.

Representation doesn’t guarantee a better deal, but it greatly reduces the risk of costly errors or oversight.

Cost vs. Value: Is Professional Help Worth It?

Professional help comes at a cost, typically ranging from a few hundred to a few thousand dollars, depending on the complexity of your case.

Whether it’s worth it depends on your situation. Compare that expense to what could happen if you make avoidable mistakes, like overcommitting to unaffordable payments, missing filing requirements, or defaulting and triggering further penalties.

In many cases, professional help pays for itself by:

  • Reducing the total repayment through better-negotiated terms
  • Avoiding penalties or enforcement actions
  • Preventing default, which saves time and financial stress

If your tax debt is small and you qualify for a simple payment plan, the DIY route may be perfectly fine. But if your situation is more complicated, the value of experienced representation is hard to ignore.

Peace of Mind and Long-Term Compliance

Managing IRS debt is rarely a one-and-done process. Staying compliant after your agreement is just as important as setting it up. Missing a future tax payment or failing to file returns can automatically cancel your agreement.

Tax professionals not only help you set up your payment plan, but they can also help you:

  • Monitor payment progress and resolve notices.
  • Keep future taxes on track so you don’t fall behind again.
  • Reassess if your situation changes.

That continued support can be invaluable, especially if you’ve struggled to stay organized with IRS requirements in the past.

When DIY Works and When It Doesn’t

If your IRS debt is manageable, your tax filing history is current, and you can afford consistent monthly payments, the DIY route is totally achievable. The IRS’s online tools are designed for taxpayers to use independently, and the process is relatively transparent.

But when debts are large, penalties are mounting, or communication with the IRS becomes overwhelming, bringing in a professional into the picture can save money, protect your assets, and help you move forward with confidence.

The right decision often comes down to complexity:

Simple balance, low debt: DIY is fine

Complicated debt, high stakes: Professional help is likely worth it.

Final Thoughts

Hiring help for an IRS Installment Agreement isn’t always necessary, but it can be invaluable in the right circumstances. If your situation is straightforward, the IRS online system makes it easy to get started and stay on top of payments.

However, once balances exceed $50,000, multiple years are unfiled, or financial circumstances are tight, professional assistance becomes worth the investment. With an expert in your corner, you’ll have confidence knowing your payment plan is structured correctly, affordable, and designed to keep the IRS off your back while you get your financial life back on track.

If you want to take the next step to financial freedom, contact Seattle Legal Services PPLC today. Our professional staff knows what it takes to get you back on track.

FAQs

Can I set up an IRS payment plan myself?

Yes. If you owe less than $50,000 and have filed all required returns, you can apply online through the IRS’s payment agreement tool. The process only takes a short time, and approval is usually automatic.

What if I owe more than $50,000?

You’ll need to apply using IRS Form 9465 and likely submit Form 433-F detailing your financial situation. This is where professional help can make the process faster and more accurate.

How much does professional tax help cost?

Depending on your situation, fees can range from a few hundred dollars for simple assistance to several thousand dollars for full negotiation and IRS representation.

What happens if I default on my payment plan?

Defaulting can cause the IRS to terminate your agreement and reinitiate collection actions like liens or wage garnishments. A professional can help you renegotiate or restore your plan if you fall behind.

Are there other options besides an installment agreement?

A professional can help you find out if there are other things you qualify for, including Offer in Compromise, Currently Not Collectible status, or penalty abatement.

Sources

https://www.irs.gov/payments/payment-plans-installment-agreements

https://www.taxpayeradvocate.irs.gov/notices/installment-agreements/

https://www.irs.gov/payments/online-payment-agreement-application#individual

https://www.irs.gov/newsroom/irs-self-service-payment-plan-options-fast-easy-and-secure

https://www.irs.gov/instructions/i9465