There may be times when taxpayers cannot pay what they owe in full, but remember the IRS has numerous payment plan options available.
The IRS offers several different payment plan options, but you may also want to consider non-IRS options (such as using a credit card or loan) depending on your financial situation. Regardless of how you pay, you should pay off your tax balance as quickly as you are able because tax bills continue to get larger as long as they remain unpaid.
If you can’t pay your full tax liability or if paying would cause financial hardship, you may want to consider applying for an Offer in Compromise.
self-service payment plans
Most taxpayers qualify for an IRS payment plan (or installment agreement) and can use the Online Payment Agreement (OPA) to set it up to pay off an outstanding balance over time. Once you complete the online application, you receive immediate notification of whether the IRS has approved your payment plan.
The process only takes a few minutes, and there’s no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans. Taxpayers who don’t qualify for online self-service should contact the IRS for other payment plan options using the phone number or address on their most recent notice.
Individual taxpayers can access the following online payment plan options:
- Short-term payment plans – For taxpayers who have a total balance less than $100,000 in combined tax, penalties and interest. This plan gives you an extra 180 days to pay the balance in full.
- Long-term payment plan (also called an installment agreement) – For taxpayers who have a total balance less than $50,000 in combined tax, penalties and interest. You can make monthly payments for up to 72 months (6 years). Taxpayers are encouraged to set up plan payments using an automatic bank withdrawal (direct debit), which eliminates the need to send a payment each month, saves postage costs, and reduces the chance of default. The IRS requires direct debit for balances between $25,000 and $50,000.
Online tools for payment plans
Qualified taxpayers with existing payment plans may be able to use the Online Payment Agreement to make changes to their plans that include revising payment dates, payment amounts or bank information for direct debit payments.
Individual taxpayers have the option to sign into or create their own Online Account. This account allows them to:
- Check on any scheduled or pending payments.
- Review payment plan details and payment history.
- View the current amount they owe.
Payment options for taxpayers already working with the IRS
Individuals who are already working with the IRS to resolve a tax issue, and who owe $250,000 or less, have the option to propose a monthly payment that will pay the balance over a period of up to 10 years. Additional qualifications and restrictions may apply to these types of payment plans.
Find more information about IRS payment plans, see Additional Information on Payment Plans on IRS.gov.