Can I pay the IRS over time?
Often, yes. An installment agreement lets you pay a balance in monthly payments, and it changes what the IRS can do while it is in place. The right agreement depends on the balance, your finances and which years are still open.
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Talk to us about your IRS problemThis first phase is a fixed fee, set before work begins. Nothing in it obligates you to the next phase.
What an agreement is.
The IRS may enter into a written agreement to accept payment in installments when it determines that doing so will help collect the liability in full or in part.
Full or partial payment
An agreement can pay the balance in full over time, or pay part of it. A partial-payment agreement must be reviewed by the IRS at least once every two years.
Law · IRC §6159(a), (d)When the IRS must say yes
For an individual's income tax of $10,000 or less (before interest and penalties), the IRS must accept an agreement if you have not, in any of the preceding five years, failed to file or pay income tax or entered into an installment agreement; the IRS determines you cannot pay in full when due; the agreement pays in full within three years; and you stay compliant while it is in effect.
Law · IRC §6159(c)Otherwise, an IRS decision
Outside that guaranteed case, whether to grant an agreement, and on what terms, is the IRS's decision. A rejection can be appealed to the IRS Independent Office of Appeals.
Law · IRC §6159(a); §7122(e)Fees
The IRS charges a user fee for installment agreements. For individuals with income at or below 250 percent of the poverty level, the fee is waived for payment by direct debit, or reimbursed on completion otherwise.
Law · IRC §6159(f)What changes once you ask, and once you agree.
A request and an agreement in effect are treated differently. So are new levies and a levy already made.
New levies stop
The IRS may not levy while your request is pending, while the agreement is in effect, or for 30 days after a rejection or termination (and during a timely appeal). This does not undo a levy first made before the request.
Law · IRC §6331(k)(2)–(3)An existing levy must be released
Once you have entered into the agreement, the IRS must release an existing levy unless the agreement provides otherwise.
Law · IRC §6343(a)(1)(C)A lien notice may be withdrawn
The IRS may withdraw a filed notice of lien once you have entered into an agreement, unless the agreement provides otherwise. This is discretionary, and the lien itself remains until the balance is paid.
Law · IRC §6323(j)(1)(B); §6325(a)The late-payment penalty is reduced
If you filed the return on time, the failure-to-pay penalty drops from 0.5 to 0.25 percent a month for months the agreement is in effect. Interest continues.
Law · IRC §6651(h); §6601What can end an agreement.
The IRS may alter, modify or terminate an agreement if you miss an installment, fail to pay another tax when due, or don't provide a requested financial update. It may also act if the information you gave was inaccurate or incomplete, if your finances change significantly, or if collection is in jeopardy.
Except in jeopardy, the IRS must give you at least 30 days' notice, with an explanation, before acting on a missed payment, a change in finances or missing information. You can request an independent administrative review of a termination.Law · IRC §6159(b)(2)–(5), (e)
Staying current on new taxes is part of the bargain. The most common way an agreement fails is a new balance in a later year.Bridge's view · practitioner judgment
The payment you can keep making.
An agreement is only useful if it lasts. We start from your actual finances and your IRS record, so the payment proposed is one you can keep making, and so that years that need filing are filed first.
Sometimes an installment agreement is not the best path at all, and another alternative, such as an offer in compromise or penalty relief, belongs alongside it or instead of it.Bridge's view · practitioner judgment
We take it from here.
- We take controlOnce you sign the authorization, we deal with the IRS for you. Send us any IRS letter you receive.
- Exactly where you standEvery year, balance, penalty and filing, taken from your IRS record rather than estimated.
- Your deadlines, risks and leverageIncluding any levy in progress and what an agreement would change.
- Your Resolution RoadmapIn writing: where you stand, what happens if nothing is done, and which paths are open to you.