If you can pay the full amount you owe within 120 days, you can avoid paying the fee to set up an installment agreement. You can apply for a short-term payment plan if you can pay in full within 120 days by using the OPA application at or calling the IRS at 800-829-1040.

How much does it cost to set up an installment agreement with the IRS?

Taxpayers are charged a one-time fee to set up an installment agreement with the IRS. A reduced fee is available for qualifying taxpayers. Generally, user fees are $105 for non-direct debit agreements, $52 for direct debit agreements and $45 for reinstatements.

When to request an installment plan to pay a tax debt?

An installment agreement allows you to pay your tax debt over time. It happens. Something unexpected occurs toward the end of the year to affect your tax situation, or maybe you made a mistake when you filled out your W-4 for your new employer. Now it’s tax time, you’ve just completed your return…and you owe the IRS.

What does it mean to have payment plan with IRS?

An IRS payment plan is an agreement that gives you an extended period of time to pay off the taxes you owe. By setting up a plan, you’ll avoid collection actions, like tax liens and tax levies .

What happens if you default on a tax payment plan?

Businesses may need to show that their business is viable. Even if you’ve made a payment plan to pay late or by instalments, interest will accrue on the unpaid debt. Note: If you default on a payment plan, we may ask you to make a higher upfront payment or to make payments by direct debit, or both, before we agree to a new plan.

How to negotiate payment plan with Australian Tax Office?

If your debt is with an external collection agency, you’ll need to negotiate this with them. Use the payment plan estimator to work out a suitable payment plan. Phone us on 13 28 66 (8.00am to 6.00pm, Monday to Friday) to set up the payment plan. If you’re negotiating with us about a debt, we may require you to show that your business is viable.