Owing tax you cannot pay all at once is stressful, but the IRS does offer payment plans. Form 9465, the Installment Agreement Request, is how you ask for one on paper. Here is how it works and what to know first.
File your return first
A payment plan is for tax you owe, not a way to skip filing. File your return on time even if you cannot pay, because the penalty for not filing is generally higher than the one for not paying. Then ask for a plan for the balance.
Try the online application first
For many people the IRS Online Payment Agreement application is faster. It can set up a plan in one visit, and fees for online plans are generally lower than for paper ones. Form 9465 is the paper alternative, for people who cannot use the online tool or prefer to mail a request.
What the form asks
- Your name, address and Social Security number, and your spouse's if you file jointly.
- The tax year or period of the balance you owe.
- How much you owe, and how much you can pay now.
- The monthly payment you propose, and the day of the month you will pay.
- Whether you want to pay by direct debit from your bank account, which can lower the setup cost and reduce the chance of missed payments.
What to expect
- Interest and penalties continue to build on the unpaid balance until it is paid, so a plan reduces the stress but not the total cost.
- There is a fee to set up a plan, which varies depending on how you apply and how you pay. The IRS publishes the current amounts.
- The IRS may ask for more details about your finances for larger balances, using forms such as the Form 433-F.
- Missing a payment or failing to file future returns can put the plan in default.
Common mistakes
- Proposing a payment you cannot sustain, which leads to default.
- Forgetting to pay current-year taxes while paying off an old balance.
- Mailing the form without a signature.
- Not keeping proof of the plan and of each payment.
If you owe a very large amount or the IRS has already started collection, consider speaking to a qualified tax professional before you commit to a payment plan.
Fill it in without uploading it
Form 9465 opens in DocZap with its fields ready to type into, and what you enter stays in your browser, so nothing is uploaded. Make sure the proposed monthly amount is one you can actually keep up. Download your copy when you are done.
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