Short On Money? Apply For an IRS Payment Plans – Seattle Legal Services
Don’t let unpaid taxes ruin your financial future – apply for an IRS payment plan today. 

IRS Installment Payment Plan

Are you short on money and struggling to make your IRS tax payments? If so, you may be eligible for an installment agreement with the IRS. An installment agreement is a payment plan that allows you to pay your taxes over time in monthly installments, and is based on your ability to pay/not pay.

Installment Agreement: In simple terms, it is a payment plan. What is not simple is determining the appropriate TYPE of payment plan and the most favorable monthly payment amount. Many taxpayers are unaware of the requirements and pitfalls of setting up a payment plan on their own with the IRS. You can bet a dime to a dollar that the IRS will want to set up a payment plan that is in its best interest, NOT YOURS. You can level the playing field by having me work to protect your interests and set up a payment plan that is optimal for you.

At Seattle Legal Services, we have experience representing taxpayers in all types of payment plan negotiations with the IRS, and we can help you set up a payment plan that is right for you, and that is based on YOUR ability to pay.

“When I set up payment plans for my clients, I negotiate the lowest legally allowable monthly payment amount. Our goal is to achieve the most favorable outcome for EVERY client. Do not mistake negotiating your own installment agreement without seeking professional help.” Call us now to see what you qualify for!

What Are IRS Payment Plans?

If you owe taxes to the IRS and can’t pay them in full, you may be able to set up an installment agreement. With an installment agreement, you make monthly payments toward your tax debt. The IRS will work with you to set up a payment plan that’s affordable for you, based on your income and other factors.

What Are the Benefits of an IRS Payment Plan?

There are several benefits of setting up an installment agreement with the Internal Revenue Service.

  • You can avoid penalties and interest. When you set up a payment plan, the IRS agrees to waive any late penalties and interest that would otherwise accrue on your tax debt.
  • Your tax won’t increase. The interest and penalties that accrue on unpaid taxes can quickly add up, making your tax debt larger. An installment agreement can help you avoid that.
  • You can avoid collection actions. Once you set up a payment plan, the IRS agrees to stop any collection actions it was taking against you. This includes wage garnishment, bank levies, and property liens.

What Are the Requirements for an IRS Payment Plan?

As with any process involving the IRS, some certain requirements and conditions must be met in order for you to qualify for an installment agreement. Make sure you have the following information before beginning the application process:

  • Name as it appears on most recently filed tax return.
  • The address you provided on your most recently filed tax return.
  • Date of birth.
  • A valid email address.
  • Your Social Security number or Individual Tax ID Number.
  • Filing status.
  • Balance due amount.
  • Financial account number, mobile phone registered in your name, or an activation code received by mail

Who Is Eligible for an IRS Payment Plan?

Generally, any taxpayer who owes taxes and can’t pay them in full can set up an installment agreement with the IRS. Following are the eligibility requirements for an installment agreement:

  • Have submitted your tax returns on time for the preceding five years.
  • Agree to pay off your tax debt within the collections statute.
  • You’re unable to pay the taxes you owe in full.
  • Are not currently experiencing bankruptcy.

What Are the Different Types of IRS Payment Plans?

If you are struggling to come up with the full amount for your tax debt, don’t worry–you may be able to set up a payment plan. The IRS offers two payment plans to help low income taxpayers who are short on cash.

Short-term payment plan

If you owe the IRS and want to avoid interest or penalties, consider making a timely payment. You can ask for an extension of time (up until 180 days) without paying any fees; however, since this is not a formal repayment option, there will still be accruing interests if payments aren’t made in full – so use caution when deciding what’s best.

Long-term payment plan with Installment Agreement

If you need more time to repay what you owe, you can set up a long-term payment plan (also called an installment agreement). You’ll have more than 180 days to repay the taxes you owe, and you may have to pay a setup fee. Penalties and interest continue to accrue during the payment plan.

How to Apply for an IRS Payment Plan?

IRS Installment Payment Plan

There are 3 ways to apply for an installment agreement.

Online

IRS Online Payment Agreement program gives you an easy way to get installment agreements. If qualified, follow instructions, and your answer will be given immediately, or alternatives offered if not eligible for this service.

You can use the IRS’s online payment agreement process; it’s as simple as filling out some forms and asking questions about your financial situation, so they know how much money is owed on taxes already due (or coming up soon!).

By Mail

If you’re not comfortable using the online system or don’t have access to a computer, you can also print and complete Form 9465 and then mail it to the address listed on the form with all required documents.

You must also complete a different form for a regular installment agreement:

By Call

If you want to set up a payment plan but have questions, you can call the IRS to speak with a customer service representative. They can help you determine eligibility and what type of plan would work best for your situation.

  • If you are an individual taxpayer, call 800-829-1040.
  • If you are a business taxpayer, call 800-829-4933.

Apply for an IRS payment plan today and focus on your finances.

How to Avoid Defaulting on an IRS Payment Plan?

If you enter into an installment agreement with the IRS, it’s essential to make your payments on time and in full. If you default on your payment plan, the IRS may take enforcement actions against you, including wage garnishment, bank levies, and tax liens.

If you’re having trouble making payments, contact the IRS as soon as possible to explain your situation and make alternate arrangements. The sooner you act, the more options you may have to avoid default.

IRS Refuses Your Installment Agreement Proposal: Causes

If the IRS denies your request for an installment agreement, there may be some reasons.

Some of your living expenses are not considered necessary

The IRS believes that you have the ability to repay your debt in full, and they do not want to set up a payment plan. For instance, if you own a second home, a boat, or an expensive car, the IRS may think you have enough extra money to pay off your tax debt without a payment plan.
Your information on your Collection Information Statement, Form 433-A, is incorrect or incomplete
The IRS may suspect you are attempting to conceal assets or earnings. If your name appears on public records as the owner of property or vehicles you didn’t disclose, or if the IRS receives W-2s or 1099s with greater pay than you declared, be ready to explain.

You failed to make payments on a previous IA

If you have defaulted on an installment agreement in the past, it will be difficult to qualify for another one. You may need to offer a larger down payment or propose an alternate payment plan.

You did not provide all the information requested.

The IRS needs to know your current financial situation to determine the best payment plan for you. The IRS will not approve your payment plan if you don’t provide requested information, such as bank account statements, proof of income, or asset ownership documents.

Factors to Consider Before Requesting an IRS Payment Plan

Before you request an installment agreement with the IRS, consider the following:

  • Additional Costs – The IRS imposes a user fee for anyone who wants to set up a payment plan. The fee will depend on how you make your payments and can be as little as $43 or as much as $105. Remember that even if you are on a payment plan, tax penalties and interest will still accrue on any unpaid balance until it is all paid off.
  • Affect on Credit Score – While an installment agreement with the IRS will not directly affect your credit score, tax liens placed on your property will. And, if you default on your payment plan, the IRS can take enforcement actions against you that could damage your credit, such as wage garnishment or a bank levy.
  • Appropriation of Refunds – If you owe the government money, any future tax refunds will be applied to your outstanding debt. If a refund is taken, you must make monthly installments until the debt is paid in full.

What if I Can’t Afford an IRS Payment Plan?

If you can’t afford an IRS payment plan, you may be able to negotiate an extension or offer in compromise. An extension will give you more time(30 days to years) to pay your debt if you qualify for non-collectible status, while an offer in compromise will allow you to settle your debt for less than what you owe.

Whatever the reason for the tax debt and the solution, it is always best to seek the help of a qualified tax attorney to ensure that you are taking the best course of action for your particular situation.

Contact Seattle Tax Attorney for More Information or Assistance with an IRS Payment Plan
If you need help negotiating an IRS payment plan or any other tax resolution issue, the tax resolution team at Seattle Legal Services is here to help.

With our 11 years of experience dealing with the IRS, we can help you find the best way to deal with your tax debt and get you on a payment plan that you can afford. Contact us today for a free initial consultation.

Get help paying your taxes with a payment plan.

Frequently Asked Questions on IRS Payment Plans

What is the interest on the IRS payment plan?

Late payment penalties range from 5% to 15% of the unpaid tax, depending on the circumstances. The yearly return on investment has been adjusted for each month to 4%. When a low income taxpayer cannot obtain a loan, the IRS provides choices for repayment.

What form is needed for the IRS payment plan?

The form you’ll need to fill out to request an IRS payment plan is the Installment Agreement Request, Form 9465. You can get this form from the IRS website, a tax professional, or by calling the IRS.

Can I file Form 9465 online?

Form 9465 can be submitted online or electronically to the Internal Revenue Service in any version of the tax law. Form 9265 is available for filing by mail or electronically.

Can IRS deny payment plans?

The IRS might not approve of a payment plan or an installment agreement for several reasons, but one of the most frequent is when someone lies or provides inaccurate information on their application. Giving too little money as an income estimate or making similar errors can cause a denial.

Does the IRS payment plan affect your credit score?

No, an IRS payment plan will not directly affect your credit score.

Is there one-time tax forgiveness?

Penalty abatement is an IRS program that eliminates any fines associated with submitting a tax return late or paying on time. This service isn’t for you if you’re consistently late with taxes or have multiple outstanding penalties.

Can you buy a house if you owe money to the IRS?

Given that an IRS lien attaches to your income or assets, it will be hard to get a mortgage. Tax liens don’t appear on credit reports but are bound to come up during a lender’s search for any outstanding liens. To them, unpaid taxes may signify the mortgage won’t be paid on time.

Does the IRS come to your house?

Understand that criminal investigators may show up at your home or business during an IRS investigation unannounced. Nevertheless, they will never ask for any type of payment on the spot.

Can the IRS take your entire paycheck?

Yes, your money is subject to seizure by the IRS. It’s called a wage levy/garnishment. But you won’t be shocked if the IRS plans to do this. The IRS can only seize your pay if you have an outstanding tax debt and have been sent a succession of notifications demanding payment and you have chosen to ignore those notices.