How to set up an IRS payment plan
You can set up a payment plan with the IRS through three routes: online through their website, by phone, or by mail. The online route is fastest — you can have a plan in place within minutes if you owe less than $25,000 and have a Social Security number or ITIN. The phone route takes longer but lets you discuss your situation with a representative. Mail is slowest but works if you have no internet access.
The IRS charges a setup fee (usually $31 to $225 depending on the method you choose and your income level) and interest on whatever you don't pay immediately. You'll make monthly payments until the balance is gone. The plan itself doesn't reduce what you owe — it just spreads the cost over time.
Before you set up a plan, you need to have filed your tax return for the year in question. If you haven't filed yet, do that first. The IRS won't let you set up a plan on a return that doesn't exist.
Key Takeaways
- Online setup through IRS.gov takes minutes if you owe under $25,000 and have a Social Security number, and costs $31 to set up.
- Phone setup (800-829-1040) takes 30 to 60 minutes and costs $225, but lets you negotiate payment amounts if your situation is tight.
- Short-term plans (120 days or less) have no setup fee, but you must request them by phone or mail.
- The IRS charges interest and penalties on top of what you owe, so the longer your plan runs, the more you pay total.
- You must file your tax return before setting up a plan — the IRS won't create a plan for a return that hasn't been filed.
Online setup for amounts under $25,000
Go to IRS.gov and search for "Online Payment Agreement." You'll land on a page where you can enter your Social Security number, date of birth, and the amount you owe. The system will show you available payment amounts and dates. You pick the one that works for your budget, agree to the terms, and the plan is active immediately.
The setup fee is $31 if you set up automatic payments from a bank account (called a direct debit arrangement). If you don't set up automatic payments, the fee is $225. The IRS strongly prefers automatic payments because they're more likely to go through on time, so they discount the fee heavily.
You'll receive a confirmation number on screen. Write it down. The IRS will mail you a formal agreement within two weeks, but you don't need to wait for it — your plan is already active.
Phone setup for any amount or if you need to negotiate
Call the IRS at 800-829-1040. Have your Social Security number, date of birth, and a copy of your tax return ready. A representative will pull up your account and discuss what you can afford to pay each month. If the standard online payment amounts don't work for you, the phone route lets you propose a different amount.
The setup fee is $225 whether or not you set up automatic payments. The call usually takes 30 to 60 minutes, depending on how busy the line is. You may wait on hold for 20 to 40 minutes before speaking to someone.
The representative will mail you a formal agreement after the call. Your plan is active as soon as you hang up, but don't make a payment until you receive the agreement in writing — it will show your exact payment amount and due date.
Mail setup if you prefer written communication
Download Form 9465 (Installment Agreement Request) from IRS.gov. Fill it out with your name, Social Security number, the tax year you owe for, and the monthly payment amount you can afford. Attach a copy of your most recent tax return and mail it to the address listed on the form (it varies by state).
Processing takes 30 to 60 days. The IRS will mail you a formal agreement once they've reviewed your request. Do not send money until you receive the agreement — if you send a check before the plan is approved, it may be applied to the wrong tax year or held in suspense.
The setup fee is $225. If you're low-income (below 250% of the federal poverty line for your household size), you may be able to request a fee waiver on the form itself.
Short-term plans that cost nothing to set up
If you can pay your entire tax bill within 120 days, you can request a short-term plan with no setup fee. These plans are available by phone or mail only — not online. Call 800-829-1040 or mail Form 9465 and specify that you want a 120-day plan.
The IRS still charges interest and penalties on the unpaid balance, but you save the $31 to $225 setup fee. This works best if you're waiting for a bonus, a tax refund from another year, or money from a sale — something you know is coming within four months.
What happens after your plan is approved
Once your agreement is in place, you make monthly payments on the due date shown in your agreement. If you set up automatic payments, the IRS withdraws from your bank account on that date. If you're paying by check or money order, mail it so it arrives by the due date.
Interest and penalties continue to accrue on the unpaid balance. The longer your plan runs, the more interest you pay. For example, a $5,000 debt on a 24-month plan will cost more in interest than the same debt on a 12-month plan.
If you miss a payment, the IRS will send you a notice. If you miss three payments in a row, your plan is terminated and the full remaining balance becomes due immediately. If this happens, call 800-829-1040 right away to explain and ask to reinstate the plan.
Modifying or ending your plan early
If your situation changes and you can afford larger payments, you can increase your monthly amount by calling 800-829-1040 or logging into your IRS account online. Paying more each month reduces the total interest you'll pay.
If you receive a large sum of money (an inheritance, a bonus, a settlement), you can pay off the plan early with no penalty. Send a check or money order with a note stating your account number and tax year, or call the IRS to arrange a payment.
If your situation gets worse and you can't afford your current payment, call 800-829-1040 to request a modification. The IRS can lower your monthly payment, but this extends your plan and increases the total interest.
Frequently Asked Questions
Can I set up a payment plan if I owe more than $25,000?
Yes, but you must do it by phone or mail, not online. Call 800-829-1040 or mail Form 9465. For amounts over $50,000, the IRS may require a financial statement showing your income and expenses before approving the plan.
What if I can't afford the monthly payment the IRS suggests?
Call 800-829-1040 and explain your situation. A representative can lower your monthly payment, which extends your plan and increases total interest. If you're very low-income, ask about a Currently Not Collectible status, which pauses collection temporarily while interest still accrues.
Do I have to set up automatic payments?
No, but the setup fee is $31 if you do and $225 if you don't. You can pay by check, money order, or credit card instead. Automatic payments are cheaper and harder to miss, so the IRS discounts them.
What if I miss a payment?
The IRS will send you a notice. If you miss three payments in a row, your plan is terminated and the full balance becomes due. Call 800-829-1040 immediately to explain and ask to reinstate the plan before enforcement action begins.
Can I pay off my plan early without a penalty?
Yes. You can pay the full remaining balance at any time with no early-payoff fee. Send a check with your account number and tax year, or call 800-829-1040 to arrange the payment.