Can't Pay Your Tax Bill? How IRS Payment Plans Work
A short-term plan costs nothing to set up. A monthly plan applied for online with automatic debit costs $29; by phone or mail without it, $178.
If you owe the IRS and cannot pay in full, the agency offers two kinds of payment plans, and the cheapest way in is usually online.
A short-term payment plan gives you up to 180 days to pay. There is no setup fee whether you apply online, by phone, by mail or in person, though penalties and interest keep running until the balance is paid. Individuals can apply online if they owe less than $100,000 in combined tax, penalties and interest.
A long-term plan, which the IRS calls an installment agreement, lets you pay monthly. Individuals can apply online if they owe $50,000 or less and have filed all required returns. Setup fees depend on how you apply and how you pay: $29 online with automatic payments from a bank account, known as a direct debit installment agreement, or $107 by phone, mail or in person; $69 online if you pay each month by other means, or $178 by phone, mail or in person. Low-income taxpayers can have fees reduced or waived.
Paying by debit or credit card adds a processor fee on top of anything the IRS charges. Business taxpayers apply by calling the number on their notice or 800-829-4933.
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