IRS Installment Agreement

An IRS Installment Agreement (IA) is a payment plan that allows you to pay your tax debt over time in monthly installments. The IRS offers several types: Guaranteed IA (debt up to $10,000), Streamlined IA (up to $50,000), Non-Streamlined IA (over $50,000), and Partial Pay IA (pay less than the full amount). Interest continues to accrue during the payment period.

A Guaranteed IA is automatically approved if you owe $10,000 or less (excluding penalties and interest), can pay within 36 months, have filed all required returns, and have not had an IA in the past 5 years. No financial disclosure is required. You can apply online at IRS.gov/OPA or file Form 9465.

A Streamlined IA is for taxpayers who owe up to $50,000 (including penalties and interest) and can pay within 72 months (6 years). No financial statement (Form 433-A/B) is required. Direct debit is required if you owe between $25,001 and $50,000. Apply online at IRS.gov/OPA or mail Form 9465.

Setup fees vary by application method: Online with direct debit: $22 (low-income: $0); Online without direct debit: $31 (low-income: $0); Phone/mail with direct debit: $107 (low-income: $43); Phone/mail without direct debit: $178 (low-income: $43). Low-income is defined as income at or below 250% of federal poverty guidelines.

Yes, interest and the failure-to-pay penalty continue to accrue on unpaid balances during an IA. The FTP penalty rate is reduced from 0.5% to 0.25% per month while the IA is in effect. Interest is currently charged at approximately 7-8% annually, compounded daily. Paying off the balance sooner saves interest.

If you miss a payment, the IRS may terminate your agreement after 30 days notice. Once terminated, the full balance becomes due immediately, and the IRS can resume collection actions including levies and liens. If you cannot make a payment, contact the IRS before the due date to request a modified payment or skip.

Yes, you can pay off your IA early at any time without penalty. Early payoff saves interest and gets you out of the agreement sooner. You can make additional payments online at IRS.gov/payments, by phone, or by mail. There is no prepayment penalty for paying more than your scheduled monthly amount.

A Partial Pay IA allows you to pay less than your full tax debt over the remaining collection period (10 years from assessment). It requires financial disclosure via Form 433-A/B. The IRS will review your finances to determine the maximum you can afford. PPIAs are typically reviewed every 2 years to check if your financial situation has improved.