Before submitting a payment by mail, you should consider other methods. A reinstatement fee may apply if your plan is delayed. Penalties and interest will continue to access until your balance is paid in full. If you have received a letter of intent to terminate your payment contract, please contact us immediately. We generally do not take enforcement action: the Office of Management and Budget has asked federal agencies to charge user fees for services such as the instalment program. The IRS uses user fees to cover the cost of processing instalment payment agreements. If the IRS approves your payment plan (remittance agreement), one of the following fees will be added to your tax bill. The changes to user fees will apply to installment contracts entered into on or after April 10, 2018. Individuals must pay credits over $25,000 by direct debit. For businesses, balances over $10,000 must be paid by direct debit. Your specific tax situation determines the payment options available to you.
Payment options include full payment, a short-term payment plan (payment in 120 days or less) or a long-term payment plan (installment contract) (payment in more than 120 days). The user fee exemption or refund applies only to individual taxpayers whose gross income is adjusted, for example for the last year for which such information is available, at a level below or below 250% of the applicable federal poverty line (low-income taxpayers) who enter into long-term payment plans (instalment agreements) as of April 10, 2018. If you are a low-income taxpayer, the user fee will be waived if you agree to make payments by direct debit by entering into a Direct Debit Agreement (DDIA). If you are a low-income taxpayer but are unable to make payments by direct debit by entering into a DDIA, the user fee will be refunded to you after entering into the remittance agreement. If the IRS system identifies you as a low-income taxpayer, the online payment settlement tool automatically reflects the applicable fees. A payment plan is an agreement with the IRS to pay the taxes you owe within a longer period of time. You should apply for a payment plan if you believe you can pay your taxes in full within the extended period. If you are eligible for a short-term payment plan, you will not be liable for a user fee.
Failure to pay your taxes when they are due may result in the filing of a federal tax lien notice and/or IRS levy action. See Publication 594, The IRS Collection Process PDF. You can view the details of your current payment schedule (type of agreement, due dates, and amount you need to pay) by logging into the online payment agreement tool. If you cannot verify your identity with a financial account number or mobile phone on your behalf, in most cases you have the option to receive an activation code via email. You can then complete the registration and log in to view your payment plan or request an initial payment plan online. Apply online using the online payment agreement tool or apply by phone, mail or in person at an IRS walk-in office by submitting Form 9465, Application for Payment Agreement. If you are not eligible for a payment plan through the online payment agreement tool, you may still be able to pay in installments. If you believe you meet the low-income taxpayer requirements but the IRS has not identified you as a low-income taxpayer, please refer to Form 13844: Application for Reduced User Fees for Instalment Agreements PDF for advice. Applicants must file the form with the IRS within 30 days of the date of their installment contract to ask the IRS to reconsider their status.