Fees to Set-up an Installment Agreement

The IRS charges a user fee of $43 to set up the installment agreement. It is possible for an installment agreement to be reinstated if the agreement defaults. Also, installment agreements may be restructured to include additional amounts owed in one agreement. Reinstating or restructuring an existing installment agreement will cost an additional $24 user fee.

How to Set-up an Installment Agreement

Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:

$25,000 or less in tax, can call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465, is available online that can be mailed to the address on the bill.
More than $25,000 in tax, may still qualify for an installment agreement, but a Collection Information Statement, Form 433F may need to be completed. Call the number on the bill or mail the Request for Installment Agreement, Form 9465 and Form 433F to the address on the bill.
A notification is sent to the taxpayer advising whether the terms of the installment agreement have been accepted or if they need to be modified.

The IRS generally may still file a Notice of Federal Tax Lien to secure the government’s interest in the taxpayer's personal or real property until final payment is made. The notice filing could have a negative impact on the taxpayer’s credit rating.

Enforced Collection Actions

Generally, IRS enforced collection actions (i.e., levy against personal or real property) are not made while an installment agreement request is being considered, or:

While an agreement is in effect,
For 30 days after a request for an agreement has been rejected, and
For any period while a timely appeal of the rejection or termination is being evaluated by the IRS.

Payments Should be Made Timely

Throughout the term of an installment agreement, payments must be made on time. If payments cannot be made due to a change in financial condition, taxpayers should contact the IRS immediately. Failure to make timely payments could default the agreement. A defaulted installment agreement could subject a taxpayer’s account to enforced collection action and potentially have a negative effect on a taxpayer’s credit standing.

Annual Statements of Balance Due

In accordance with the law, installment agreement taxpayers receive an annual statement from the IRS. The statement provides the amount owed at the beginning of the statement period, the payments (credits) posted to account(s), any fees or assessments, and the ending balance. Currently, the annual statement is sent each year in July