How to ask the IRS for a payment plan

You can request a payment plan directly from the IRS through their online system, by phone, or by mail. The fastest route is the Online Payment Agreement tool on IRS.gov, which lets you set up a plan in minutes without speaking to anyone. If you owe less than $50,000 in combined taxes, penalties, and interest, you can use this tool immediately. For larger amounts or if you prefer to speak with someone, call the IRS at 1-800-829-1040 during business hours, or submit Form 9465 (Installment Agreement Request) by mail with your tax notice.

The IRS will review your request and either approve it right away or contact you with questions. Once approved, you'll receive a confirmation letter with your monthly payment amount, due date, and the total number of payments. You can change your payment method or amount later if your situation changes, but you must stay current on payments to keep the plan active.

Key Takeaways

  • The Online Payment Agreement tool on IRS.gov is the fastest way to set up a plan if you owe under $50,000 and have a recent tax notice.
  • You can call 1-800-829-1040 to request a plan by phone, or mail Form 9465 with your tax notice if you prefer not to use the online system.
  • The IRS charges a setup fee (between $31 and $225 depending on your method) and adds interest and penalties to your balance until it is paid in full.
  • Monthly payments are typically between $25 and $500, but the IRS will work with you if you cannot afford the standard amount.
  • If you miss a payment or fall behind on taxes, the IRS can cancel your plan and pursue collection action, so contact them immediately if you cannot pay.

Using the Online Payment Agreement tool

Go to IRS.gov and search for "Online Payment Agreement" to find the tool. You will need your Social Security number or Individual Taxpayer Identification Number, your filing status, and the tax year you owe for. Have your most recent tax notice in front of you — it shows the exact amount you owe and the notice number, both of which the tool will ask for.

The tool will show you payment options based on what you owe. You can choose a monthly payment amount (the IRS suggests an amount, but you can lower it if needed), and select your payment method: direct debit from your bank account, credit or debit card, or payroll deduction. Direct debit is the cheapest option because it has the lowest setup fee. Once you submit, you'll get a confirmation number and a letter will arrive in the mail within two weeks.

This method works only if you owe under $50,000 and have filed your tax return. If you haven't filed yet, you must file first before requesting a plan.

Requesting a plan by phone or mail

Call 1-800-829-1040 Monday through Friday, 7 a.m. to 7 p.m. your local time. Have your Social Security number, filing status, and tax notice ready. Tell the representative you want to request an installment plan. They will ask what monthly payment you can afford and may ask about your income and expenses. The call usually takes 15 to 20 minutes. You'll receive a confirmation number on the call and a letter in the mail within two weeks.

If you prefer to mail your request, fill out Form 9465 (Installment Agreement Request) and send it with your tax notice to the address shown on your notice. Include a cover letter stating the monthly payment amount you can afford. Mail typically takes two to four weeks for the IRS to process, and they will send you a letter confirming whether your plan was approved.

Use the phone or mail route if you owe more than $50,000, if you don't have a recent tax notice, or if you're uncomfortable using the online tool.

What the IRS charges for a payment plan

The IRS charges a setup fee when you create a plan. The fee depends on how you set it up: $31 if you use direct debit from your bank, $225 if you use a credit or debit card, and $31 to $225 if you set it up by phone or mail (the IRS determines the amount based on your situation). This fee is added to what you owe.

You will also continue to pay interest and penalties on your balance until it is paid off. Interest accrues daily at a rate set by the IRS each quarter (currently around 8 percent per year, but this changes). Failure-to-pay penalties also accrue monthly at 0.5 percent of what you owe. These charges mean your total debt grows each month, so paying faster saves you money.

The IRS does not charge a fee to change your payment amount or payment method once your plan is active, but they do charge a fee if you need to modify the plan after it's been set up (for example, if you need to lower your payment and the IRS has to approve a new agreement).

Setting a monthly payment amount you can afford

The IRS will suggest a payment amount based on what you owe and how long you want to take to pay it off. Standard plans last three to six years, but you can request a longer timeline if you need smaller monthly payments. The IRS has no legal minimum payment amount, but they typically won't accept plans under $25 per month.

If the suggested amount is too high, you can propose a lower payment. The IRS will ask about your income, housing costs, food, utilities, and other necessary expenses to determine what you can realistically afford. Be honest about your situation — if you overstate what you can pay and then miss payments, the IRS will cancel your plan.

If your financial situation changes after your plan is approved (you lose income, have a medical emergency, or your expenses rise), contact the IRS and ask to modify your plan. You can lower your payment amount, extend the timeline, or temporarily pause payments in some cases. Call 1-800-829-1040 to discuss your options.

What happens after your plan is approved

You will receive a letter from the IRS confirming your plan. This letter shows your monthly payment amount, the due date each month, the total number of payments, and your account number. Keep this letter — you'll need it if you have questions or need to make changes.

Make your first payment by the date shown in the letter. You can pay online through IRS.gov, by phone, by mail, or through your bank's bill-pay system. If you set up direct debit, the IRS will automatically withdraw your payment each month on the due date you chose.

Stay current on your payments. If you miss a payment, the IRS will send you a notice. If you miss three payments in a row, the IRS can cancel your plan without warning and pursue other collection methods, including wage garnishment or bank levies. If you know you'll miss a payment, contact the IRS immediately — they may be able to work with you rather than cancel the plan.

If you cannot afford the payment plan

If the IRS's lowest suggested payment is still too high, you have other options. You can request a Currently Not Collectible status, which temporarily pauses collection while you're in financial hardship. Interest and penalties still accrue, but the IRS won't pursue wage garnishment or bank levies. This status lasts up to two years and the IRS will review your case periodically. Call 1-800-829-1040 and ask about Currently Not Collectible status.

You can also request an Offer in Compromise, which allows you to settle your tax debt for less than the full amount owed. This requires detailed financial documentation and the IRS approves only about one in four applications. The process takes several months. Use the Offer in Compromise Pre-Qualifier tool on IRS.gov to see if you might be may be able to access.

If you're struggling with a large tax debt and multiple collection notices, consider consulting a tax professional or calling the IRS Taxpayer Advocate Service at 1-877-777-4778. The Advocate Service is free and can help if you believe the IRS has made an error or if you need help understanding your options.

Frequently Asked Questions

Can I set up a payment plan if I haven't filed my tax return yet?

No. You must file your return first. Once the IRS processes your return and sends you a bill, you can request a payment plan. If you're behind on filing, contact a tax professional or call the IRS at 1-800-829-1040 for help filing past returns.

What if I pay off my plan early?

You can pay off your plan at any time without penalty. Simply send a payment for the remaining balance. Interest will stop accruing once the balance reaches zero. There is no fee for paying early.

Will a payment plan affect my credit score?

The IRS does not report payment plans to credit bureaus, so setting up a plan itself won't hurt your credit. However, if the IRS filed a tax lien before you set up the plan, that lien will appear on your credit report and will affect your score until it's released (usually after you pay off the debt).

Can the IRS change my payment plan without asking me?

The IRS can cancel your plan if you miss three payments in a row, but they cannot lower your payment amount or change your due date without your consent. If your financial situation changes, contact them to request a modification.

What if I owe taxes for multiple years?

You can set up a single payment plan that covers all the years you owe. The IRS will combine your balances and calculate one monthly payment. Tell the representative or online tool which tax years you owe for when you request the plan.