How to Set Up an IRS Payment Plan When You Owe Taxes

If you can’t pay your federal taxes in full, the Internal Revenue Service (IRS) often allows you to make monthly payments through an installment agreement, commonly called an IRS payment plan. Instead of ignoring the bill (which leads to penalties, interest, and collection actions), you formally ask the IRS to let you pay over time.

This guide focuses on how IRS payment plans typically work in real life, where to apply, what to prepare, and what to expect after you submit your request.

Quick summary: What an IRS payment plan is and how it works

  • An IRS payment plan is a formal agreement with the IRS (federal tax agency) to pay your tax balance over time.
  • You usually request it online through the IRS Online Payment Agreement system or by mailing Form 9465.
  • You must still file all required tax returns before the IRS will approve a plan.
  • While on a plan, penalties and interest continue, but enforced collection (like levies) can be limited if you make payments.
  • Rules and eligibility can vary by your balance, filing status, and overall situation, and approval is never guaranteed.

Where you actually go to request an IRS payment plan

The official agency that handles payment plans for federal income taxes is the Internal Revenue Service (IRS). There are three main “touchpoints” most people use:

  • IRS Online Payment Agreement application – This is the official IRS web portal where you can apply for most standard payment plans if you owe under certain limits.
  • IRS phone assistance line – You can call the IRS using the main taxpayer assistance number listed on the official IRS.gov site and request an installment agreement over the phone.
  • Local IRS Taxpayer Assistance Center (TAC) – These are walk‑in or appointment-based IRS field offices where you can get in-person help, submit forms, or ask about payment options; you usually need to schedule an appointment first using the phone number on the IRS site.

To avoid scams, look for IRS resources that clearly end in “.gov” and never give payment or personal information to third‑party sites claiming to “set up a payment plan for you” unless you are certain they are legitimate tax professionals.

Concrete action you can take today:
Search for the official “IRS Online Payment Agreement” on a .gov site, and check whether you qualify for an online plan based on your balance due and filing status.

After you do this, the system will typically tell you whether you can apply online immediately, need to call the IRS, or must send in a specific form (usually Form 9465, and sometimes financial information like Form 433‑F).

Key terms to know

Key terms to know:

  • Installment Agreement — The IRS’s name for a payment plan that lets you pay your tax debt in monthly installments instead of all at once.
  • Short-Term Payment Plan — Usually up to 180 days to pay the full balance; often no setup fee, but interest and penalties still apply.
  • Long-Term Payment Plan — Monthly installment agreement that can last several years until the balance is paid.
  • User Fee — A setup fee the IRS commonly charges to establish a long-term payment plan; the amount can vary based on income and whether you use direct debit.

What you need to prepare before you apply

The IRS rarely sets up a payment plan if you are not current with filing, so your first step is usually to file all required tax returns (even if you can’t pay in full).

Documents you’ll typically need:

  • Most recent tax bill or notice from the IRS showing how much you owe, tax year(s), and any notice number.
  • Proof of income, such as recent pay stubs, self-employment records, or benefit statements, especially if you’re asked to complete a financial information form.
  • Bank account information (routing and account number) if you choose a Direct Debit Installment Agreement to have payments automatically withdrawn.

You’ll also typically need:

  • Your Social Security Number or Individual Taxpayer Identification Number (ITIN).
  • Your filing status (single, married filing jointly, etc.) and last filed tax year information.
  • A realistic monthly budget amount you can actually pay; the IRS will often ask you to propose a monthly payment.

If you owe more than certain thresholds (for example, well above $25,000–$50,000), the IRS may often require additional forms, such as Form 433‑F (Collection Information Statement), listing your income, expenses, assets, and debts.

Step-by-step: How to request an IRS payment plan

1. Confirm your total balance and which years are involved

Use your IRS tax bill or notice or check your tax account information through the IRS’s official online account system to see:

  • How much you owe in total (tax, penalties, and interest).
  • Which tax years are included.
  • Any approaching due dates or deadlines indicated in your notice.

What to expect next: You’ll use this total balance to determine whether you can apply online or must call/mail forms, and to choose a monthly payment amount.

2. Decide which type of plan you’re aiming for

Based on how quickly you can realistically pay, choose between:

  • Short-Term Payment Plan (up to about 180 days)

    • Best if you can pay everything within a few months.
    • Typically no setup fee, but penalties and interest continue.

  • Long-Term Payment Plan (Installment Agreement)

    • For people who need more than 180 days.
    • Commonly has a setup fee, which may be lower if you use direct debit or qualify as low income.

What to expect next: When you go to the IRS Online Payment Agreement system or talk with an IRS representative, you’ll be asked which type you’re requesting and how much you can pay monthly.

3. Apply using the official IRS channel that fits your situation

Pick one of these common routes:

  1. Online Payment Agreement application

    • Generally available if you owe under certain limits (often around $50,000 for long-term, higher for short-term, though this may change).
    • You’ll log in, verify your identity, enter your balance, and propose a monthly payment and due date.
    • Next step: At the end, you usually get an on-screen decision: immediate approval, conditional approval, or instructions to call or send more information.

  2. Form 9465 (Installment Agreement Request) by mail

    • Often used if your balance or situation doesn’t qualify for the simple online option or you’re already mailing a tax return with unpaid balance.
    • You complete Form 9465, including your proposed monthly payment and bank information if using direct debit, and mail it to the address on the form or on your IRS notice.
    • Next step: The IRS typically mails you a notice approving, modifying, or denying your request, or asking for more information; this can take several weeks.

  3. Phone call to the IRS

    • You call the main IRS taxpayer assistance number listed on IRS.gov or on your latest notice.
    • Simple script you can use: “I received a bill for unpaid taxes. I can’t pay in full. I’d like to set up an installment agreement and see what options I qualify for.”
    • Next step: The agent will verify your identity, review your account, and either set up a plan on the spot, ask you to submit forms, or explain why a plan can’t be approved right away.

4. Choose your payment method and understand the costs

When your plan is approved or being set up, you’ll be asked how you want to pay each month:

  • Direct Debit from bank account (most reliable, lower user fee in many cases).
  • Payroll deduction through your employer (requires additional IRS form and employer cooperation).
  • Check, money order, or credit/debit card (can have higher fees or risk of missed payments if you forget).

You’ll also be told about:

  • The user fee to set up the plan (amount varies, and may be reduced or waived for some low-income taxpayers).
  • That interest and penalties continue until the full balance is paid, so paying more each month reduces total cost.

What to expect next: Once the method is set, you’ll receive a written confirmation (usually a notice of installment agreement), including your monthly amount, due date, and where/how to pay.

5. Start making payments and keep your account in good standing

Once your first payment due date arrives, you must:

  • Make at least the minimum monthly payment on time every month.
  • Continue filing all future tax returns on time and pay any new taxes owed, or your agreement can default.

If your financial situation changes:

  • You can commonly request to modify your installment agreement by contacting the IRS through its phone line or online system.
  • The IRS may allow you to lower or sometimes increase payments, depending on your updated financial information.

What to expect next: If you pay as agreed, the IRS typically avoids enforced collection actions like levies; if you miss payments, the IRS can terminate the agreement and resume full collection efforts.

Real-world friction to watch for

One common snag is that the IRS sometimes refuses or delays a payment plan because not all tax returns are filed or the proposed payment is too low compared to your income and assets. If this happens, you may receive a notice asking you to file missing returns or submit a financial statement (like Form 433‑F) before they will reconsider the payment plan.

How to handle problems, avoid scams, and get free help

If you run into issues—like your online application being rejected, or you’re asked for financial forms you don’t understand—there are several legitimate help options:

  • Local IRS Taxpayer Assistance Center (TAC)

    • Call the appointment line listed on IRS.gov to schedule a visit.
    • Bring your tax notices, ID, and any completed forms (9465, 433‑F, etc.).
    • Staff can explain what’s blocking your plan and what documents are needed.

  • Low-Income Taxpayer Clinic (LITC)

    • These are independent nonprofits, often tied to legal aid organizations or law schools, that help eligible taxpayers with IRS disputes and collection issues.
    • They may assist with installment agreement negotiations at little or no cost if your income is below certain levels.

  • Certified tax professionals (EA, CPA, tax attorney)

    • For complicated cases (large balances, liens, prior defaults), a licensed tax professional can help gather financial documentation and negotiate terms.

Because this topic involves money and personal identity, be careful of:

  • Companies promising to “wipe out your tax debt” or “guaranteed approval” for an IRS plan for a large fee.
  • Websites that are not .gov but claim to be the IRS or demand payment information up front.
  • Anyone asking you to pay your “IRS setup fee” using gift cards, wire transfers, or peer-to-peer apps; the IRS does not request payment this way.

Use official IRS contact information and documents, keep copies of everything you send, and check your mail regularly for IRS responses so you can respond quickly to any additional requests. Once you’ve confirmed where to apply and gathered your documents, you’re ready to submit your payment plan request through the official IRS channel that best fits your situation.