Federal tax liability may result in you owe a substantial amount of money to the IRS when April 15 arrives. This liability may cause you to worry due to an inability to pay the tax bill all at once. Nevertheless, the IRS has a contingency for people who cannot pay their tax bills all at once. Although the IRS encourages single payments, it offers an installment agreement. You generally should be allowed to enter into an installment agreement if you owe $25,000 or less to the IRS.
Navigate to the IRS Installment Payments webpage (See Resources). Click on the "Online Payment Agreement (OPA)" link if you owe less than $25,000 to the IRS, including interest and penalties.
Click the "payment agreement" link to begin the payment agreement application. Click the "OK" button on the next window. Fill out the online questionnaire. Upon completion, the IRS will immediately indicate whether you qualify for an installment plan.
Make your installment payment to the IRS, after approval, via one of the IRS-approved websites (see Resources).
If you have more than $25,000 in tax debt, you must fill out and mail to the IRS, forms 9465 and 433-F. The IRS will contact you regarding whether it will allow you to enter into a payment plan.
You may also call the IRS at 800-829-1040 to set up a payroll deduction or direct checking account deduction to make your installment plan payments.
Andrew Mayfair has written professionally since 2009 when his article on patent law was published in the "Loyola of Los Angeles Entertainment Law Review." Mayfair earned his Bachelor of Science in biochemistry from the University of California, Davis and his Juris Doctor from the University of the Pacific, McGeorge School of Law.