The three ways to set up a payment plan with the IRS
You can set up an IRS payment plan in three ways: online through the IRS website, by phone with an IRS representative, or by mail. The online route is fastest and requires no waiting on hold. The phone route lets you ask questions in real time. The mail route takes the longest but works if you have no internet access or prefer a paper record.
All three methods lead to the same outcome: a formal agreement where you pay your tax debt in monthly installments instead of a lump sum. The IRS charges a fee to set up the plan, and interest and penalties continue to accrue on the unpaid balance until you finish paying.
Before you choose a method, you need to know your total tax debt, have your Social Security number or ITIN ready, and know your current income and expenses. The IRS uses this information to decide whether you may have access to for a plan and how much you can afford to pay each month.
Key Takeaways
- The IRS Online Payment Agreement tool on IRS.gov is the fastest way to set up a plan and costs $31 if your monthly payment is $25 or more.
- You can call the IRS at 1-800-829-1040 to set up a plan by phone, but wait times are often long and the setup fee is higher ($225 for most plans).
- Mailing Form 9465 (Installment Agreement Request) to the IRS address on your tax notice works but takes several weeks to process.
- The IRS will not set up a plan unless you have filed all required tax returns for the past six years, even if you owe nothing on some of them.
- Your monthly payment amount depends on your income, expenses, and how much you owe, and the IRS may reject a plan if the monthly payment is too low.
Setting up a plan online through IRS.gov
Go to IRS.gov and search for "Online Payment Agreement" or navigate directly to the payment agreement tool. You will need to enter your Social Security number or ITIN, your date of birth, and your mailing address as it appears on your most recent tax return. The IRS will verify this information against its records before you proceed.
Next, you will enter the tax year(s) you owe for and review the total amount due, including penalties and interest calculated to the current date. The tool will show you the setup fee (usually $31 for online plans) and let you choose a monthly payment amount. The IRS will calculate how many months the plan will run based on your payment size.
Once you confirm your information and payment amount, the IRS will ask how you want to pay each month. You can authorize automatic withdrawals from your bank account (called a Direct Debit arrangement), pay by credit or debit card through a third-party processor, or mail a check each month. Direct Debit is the cheapest option because it qualifies for the lower $31 fee; other methods may cost more.
After you submit, you will receive a confirmation number on screen. Print or save this number. The plan becomes active immediately, and you will receive a formal notice by mail within two weeks confirming the terms.
Setting up a plan by phone with the IRS
Call the IRS at 1-800-829-1040 during business hours (Monday through Friday, 7 a.m. to 7 p.m. your local time). Have your Social Security number, date of birth, and mailing address ready. Tell the representative you want to set up a payment plan.
The representative will ask about your income, expenses, and ability to pay. They will review your tax account to confirm you have filed all required returns. If you have not filed returns for prior years, the IRS will not set up a plan until you do. The representative can sometimes help you file those returns during the same call, or they can mail you the forms.
Once the representative confirms you are may be able to access, they will discuss payment amounts with you. They may suggest a specific monthly payment based on your financial situation, or they may ask what you can afford. The representative will explain the setup fee (typically $225 for a standard plan, lower if you use Direct Debit) and the total number of months the plan will run.
After you agree to the terms, the representative will set up the plan on the spot. You will receive a confirmation number by phone and a formal notice by mail within two weeks. The plan becomes active immediately, and your first payment is usually due within 30 days.
Setting up a plan by mail using Form 9465
Download Form 9465 (Installment Agreement Request) from IRS.gov or request it by phone at 1-800-829-1040. Fill out the form with your name, Social Security number, tax year(s) you owe for, and the monthly payment amount you propose. Attach a copy of your most recent tax return and any tax notices you received from the IRS.
Mail the form to the address shown on your tax notice or in the Form 9465 instructions. The address varies by state. Include a check or money order for the setup fee if you want to pay it now, or the IRS will add it to your first payment. Do not send cash.
The IRS will process your request within 30 to 60 days. You will receive a formal notice by mail confirming whether your plan was approved and what your monthly payment will be. If the IRS rejects your proposed payment amount as too low, the notice will explain why and suggest an alternative.
Do not make payments before you receive approval. If you send money before the plan is official, the IRS may apply it to your account but will not consider it part of a formal agreement, and you could still face collection action.
What happens after your plan is approved
Once your plan is active, you must make your monthly payment on or before the due date shown in your approval notice. If you set up Direct Debit, the IRS will withdraw the payment automatically from your bank account each month. If you chose to pay by check or card, you are responsible for sending or submitting the payment on time.
Interest and penalties continue to accrue on your unpaid balance throughout the plan. Your monthly payment covers part of the principal (the original tax you owe) and part of the interest and penalties. The IRS will send you an annual statement showing how much you have paid and how much remains.
If your financial situation changes and you can no longer afford your monthly payment, contact the IRS immediately. You can request a modification to lower your payment or extend the plan. If you miss a payment, the IRS may terminate the plan and pursue collection action, so contact them as soon as you know you will be late.
Setup fees and what they cover
The IRS charges a fee to set up a payment plan. The amount depends on how you set it up and how you pay:
| Setup Method | Payment Method | Fee |
|---|---|---|
| Online | Direct Debit | $31 |
| Online | Credit/debit card or check | $225 |
| Phone | Direct Debit | $225 |
| Phone | Credit/debit card or check | $225 |
| Mail (Form 9465) | Any method | $225 |
The fee covers the cost of setting up and maintaining your agreement. It is a one-time charge, not a monthly fee. The IRS will either deduct it from your first payment or add it to your total debt, depending on which option you choose during setup.
If your income is below 250 percent of the federal poverty line, you may be able to request a fee reduction or waiver. Contact the IRS to ask about this option.
What disqualifies you from a payment plan
The IRS will not set up a payment plan if you have not filed tax returns for all years the IRS requires. Generally, this means you must have filed returns for the past six years, even if you do not owe tax on some of them. If you are missing returns, you must file them before the IRS will approve a plan.
The IRS may also reject a plan if your proposed monthly payment is too low to pay off the debt within a reasonable time frame. The IRS considers "reasonable" to be roughly six years for most taxpayers, though this can vary. If your proposed payment is rejected, the IRS will tell you the minimum monthly payment they will accept.
If you are currently in bankruptcy, the IRS cannot set up a plan while the bankruptcy is active. You must wait until the bankruptcy is discharged or dismissed before you can set up a payment plan with the IRS.
Frequently Asked Questions
Can I set up a payment plan if I still owe money from a previous plan?
Yes. You can set up a new plan that includes both the old debt and the new tax debt. Contact the IRS by phone or through the online tool to consolidate your debts into one plan. This simplifies your payments and may lower your monthly amount if you extend the timeline.
What if I cannot afford the minimum monthly payment the IRS requires?
Contact the IRS and explain your situation. You may be able to request a Currently Not Collectible status, which temporarily pauses collection action while you work on your finances. Interest and penalties still accrue, but you are not required to make payments. After a period of time, the IRS will review your situation and may set up a plan at that point.
Do I need to hire a tax professional to set up a payment plan?
No. You can set up a plan yourself using the online tool, by phone, or by mail. A tax professional or enrolled agent can help if you want, but they are not required. The IRS does not charge extra for professional help, and it does not speed up the process.
What happens 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, and your plan will end. Interest and penalties stop accruing once the debt is fully paid. There is no fee for early payoff.
Can I change my monthly payment amount after the plan starts?
Yes. Contact the IRS by phone at 1-800-829-1040 or through the online payment agreement tool to request a modification. You can increase your payment to pay off the debt faster, or decrease it if your income has dropped. The IRS will review your request and send you a new approval notice if they agree to the change.