Payment plans
IRS installment agreements and Form 9465.
An IRS installment agreement is a written agreement under 26 U.S.C. section 6159 to pay a federal tax balance in monthly installments. An individual who owes $50,000 or less and has filed all required returns may qualify to apply online. Form 9465 is the paper request for individuals, and it calls for Form 433-F with a balance over $50,000 or a payment below the minimum it computes. The IRS generally may not levy while a request is pending or an agreement is in effect, but interest and penalties keep accruing and refunds are applied to the balance.
Mr. Powell requests and negotiates installment agreements for individuals and closely held businesses in IRS collection matters nationwide, from the office at 1629 K Street NW, Suite 300 in Washington, DC.
26 U.S.C. sections 6159, 6331, 6651, and 7345, Treasury Regulation 301.6159-1, Form 9465 and its instructions, Internal Revenue Manual 5.14, Publication 1660, and the IRS pages linked below were checked on September 23, 2026. The notice, the form, and its instructions control over this summary. This page is not legal advice.
What section 6159 provides.
Section 6159(a) lets the IRS enter into a written agreement to accept any tax in installments when the agreement will facilitate full or partial collection. Under section 6159(b) the agreement stays in effect for its term unless the IRS acts on a listed ground: information given before the agreement was inaccurate or incomplete, collection is in jeopardy, the taxpayer's finances have significantly changed, or the taxpayer fails to pay an installment, pay another tax when due, or provide a requested financial update. Except in jeopardy, the IRS must give at least 30 days' notice explaining why.
Section 6159(c) requires the IRS to accept a guaranteed agreement from an individual who owes $10,000 or less in income tax, not counting interest and penalties, who in the preceding five years filed and paid income tax and entered into no installment agreement for it, who cannot pay in full when due, and who agrees to pay within three years and stay compliant.
Section 6159(d) requires review of a partial payment agreement at least every two years. Section 6159(e) requires an independent administrative review of a termination on request. Section 6159(f) caps the user fee. For a taxpayer with adjusted gross income at or below 250 percent of the poverty level, it waives the fee when payments are made by electronic debit and requires reimbursement on completion of the agreement when they cannot be.
Official source: 26 U.S.C. 6159
Official source: Treasury Regulation 301.6159-1
Agreement types
The agreements the IRS offers today.
Guaranteed installment agreement
The section 6159(c) agreement, paid within three years or by the collection statute expiration date, whichever is earlier. IRM 5.14.5.3 says that, as a matter of policy, the IRS may grant it even when the taxpayer could pay in full, with no financial statement or lien determination.
Simple payment plan
IRM 5.14.5 now uses this name for what the IRS called a streamlined installment agreement. It covers individuals, out-of-business sole proprietors, and businesses without trust fund taxes that owe $50,000 or less in assessed tax, penalties, and interest and are current with filing and payment. No Collection Information Statement is required; the balance must be paid by the collection statute expiration date, and the IRS says most taxpayers have up to 10 years.
Simple payment plan (business trust fund)
IRM 5.14.1 now uses this plan in place of the express agreement for in-business trust fund accounts. It covers a business with trust fund taxes that owes $25,000 or less in assessed tax, penalties, and interest. IRM 5.14.5 removed the express agreement's 24-month full-pay requirement; the plan now must pay in full by the collection statute expiration date. IRM 5.14.5.4 requires no financial statement, and it excuses the trust fund recovery penalty determination only when the plan is granted within 120 days of case assignment.
Agreement based on a Collection Information Statement
Above those thresholds, Tax Topic 202 says a Collection Information Statement on Form 433-F, 433-A, or 433-B and a Notice of Federal Tax Lien determination may be required.
Partial payment installment agreement
An agreement that will not pay the balance before the collection statute expiration date. IRM 5.14.2 requires a full Collection Information Statement, requires that equity in assets be addressed first, and requires managerial approval. Section 6159(d) requires a review at least every two years, and IRS policy permits a waiver extending the collection period only with this type of agreement, and only in certain situations.
The Form 433 page covers the statement behind the last two types, and alternatives to an offer compares partial payment with currently not collectible status.
Official source: IRM 5.14.5
Official source: IRM 5.14.2
Official source: Simple payment plans
Official source: Tax Topic 202
Online, by phone, or on Form 9465.
An individual may qualify to apply through the IRS Online Payment Agreement tool for a long-term plan when tax, penalties, and interest total $50,000 or less and all required returns are filed, and for a short-term plan of 180 days or less when the total is less than $100,000. The IRS says the decision is immediate. A sole proprietor applies as an individual. Business accounts cannot apply online; the IRS sends them to the number on the notice or 800-829-4933. Individuals can also call 800-829-1040.
Form 9465, Installment Agreement Request (Rev. September 2020, instructions Rev. July 2024), is the paper request for an individual who owes income tax, owes or may owe a trust fund recovery penalty, or owes employment taxes from a sole proprietorship no longer operating. The instructions say not to use it to pay in full within 180 days or to apply online. An operating business that owes employment taxes, a taxpayer in bankruptcy, and a taxpayer with a pending or accepted offer in compromise call the IRS instead.
Line 10 divides the balance by 72. The form says Form 433-F must be attached if the balance is over $50,000, or if the payment offered is below the line 10 figure and cannot be raised to it. For a balance over $25,000 but not more than $50,000, a payment that meets line 10 needs no Form 433-F if the taxpayer chooses direct debit on line 13 or payroll deduction on line 14. A taxpayer in that range who defaulted on an agreement in the past 12 months and offers less than line 10 also completes Part II. A payment that will not pay the balance by the collection statute expiration date may be considered for a partial payment agreement. Those line 10 and line 11b rules come from the September 2020 form; IRM 5.14.5.2, revised July 21, 2026, removed the 72-month minimum payment rule and the direct debit or payroll deduction requirement for simple payment plans of $50,000 or less.
The instructions say the IRS usually responds within 30 days and may take longer for a return filed after March 31. Filed alone, the form goes to the service center assigned by state: for a District of Columbia or Maryland resident, Andover, Massachusetts, or Philadelphia if the Form 1040 for any year in the request includes Schedule C, E, or F.
Fees checked on irs.gov on September 23, 2026: a long-term plan paid by direct debit costs $29 online or $107 by phone, mail, or in person, and a plan paid another way costs $69 online or $178 by phone, mail, or in person. A short-term plan has no setup fee. For a low-income individual, the direct debit fee is waived and the other fee is $43, which may be reimbursed. The fee listed to revise a plan or reinstate it after default is $6 online or $89 by phone, mail, or in person, with no fee for changes to an existing direct debit agreement. The July 2024 instructions still print a $22 online direct debit fee and a $10 online reinstatement fee; IRM 5.14.1.2 lists the $29 direct debit rate as effective July 5, 2026.
Official source: Online payment agreement application
Official source: Payment plans; installment agreements
Official source: Form 9465
Official source: Instructions for Form 9465
Official source: IRM 5.14.1
While the request is pending and the agreement is in effect.
Section 6331(k)(2) bars a levy while a request is pending, for 30 days after a rejection, while an agreement is in effect, for 30 days after a termination, and during an appeal filed within those 30 days. Treasury Regulation 301.6159-1 says a request is pending once the IRS accepts it for processing, and it lifts the bar on a written waiver, a request submitted solely to delay collection, or jeopardy. IRM 5.14.1.5 says an existing levy must be released when an agreement is approved unless the agreement provides otherwise.
Section 6331(k)(3) applies the suspension rule of section 6331(i)(5), so the collection period is suspended while a request is pending, for 30 days after a rejection or termination, and during a timely appeal. It keeps running while the agreement is in effect, a period section 6331(k)(3) leaves out of the suspension. The regulation also keeps it running when a written waiver, a request made solely to delay, or jeopardy lifts the levy bar.
Interest and penalties keep accruing. For an individual who filed the return on time, including extensions, section 6651(h) cuts the failure-to-pay penalty from 0.5 percent to 0.25 percent for each month an agreement is in effect. IRM 5.14.1.2 applies the reduction only when no CP504, LT11, or Letter 1058 has raised the rate to 1 percent, and it says the rate returns to 0.5 percent if the agreement is terminated.
The levy bar does not reach refunds or liens. Refunds are applied to the balance, and the monthly payment is still due. The regulation allows a Notice of Federal Tax Lien filing while levy is barred. No lien determination is required for a guaranteed agreement or a simple payment plan, though IRM 5.14.5 lets a revenue officer file a lien notice with manager concurrence. IRM 5.14.1.4.3 says a filing while an agreement is in effect is not general practice and needs group manager approval. Section 7345 excludes a debt paid on time under an agreement from passport certification.
Official source: 26 U.S.C. 6331
Official source: 26 U.S.C. 6651
Official source: 26 U.S.C. 7345
Official source: Failure to pay penalty
Official source: Revocation or denial of passport
Default and appeal
When an agreement goes into default.
What puts an agreement in default
IRM 5.14.11.3 lists a missed installment, another tax not paid when due, a financial update not provided on request, inaccurate or incomplete information given before the agreement, and a modified payment not made. The Form 9465 instructions say a balance due on a later return that is not paid on time puts the agreement in default, and they require enough withholding or estimated tax to pay each later year in full.
CP523
CP523 is the notice that the IRS intends to terminate the agreement and levy. The IRS says to contact it no later than 30 days from the date of the notice, and IRM 5.14.11.4 says the agreement is not terminated until that 30-day period has run. The date printed on the notice controls.
Reinstatement
IRM 5.14.11.5 says an agreement in default but not yet terminated must be reinstated when the default is cured, unless another reason for default exists. The IRS CP523 page says a reinstatement fee, or full payment of a new tax liability, may be required.
Collection Appeals Program
Publication 1660 allows an appeal within 30 days from the date of the notice of intent to terminate and for 30 more days after termination, but only once. A phone request is enough unless a revenue officer sent the notice; then it must be in writing, preferably on Form 9423, sent to the office that took the action, not to Appeals.
What the appeal does
Section 6331(k) bars a levy during a timely appeal of a termination, absent jeopardy. Publication 1660 says the CAP decision binds both the taxpayer and the IRS and cannot be taken to court. A rejected request is appealed the same way, within 30 days of the rejection letter.
Read CP523 for the notice itself, and LT11 or Letter 1058 for the final notice of intent to levy and its hearing rights.
Official source: IRM 5.14.11
Official source: Understanding your CP523 notice
Official source: Publication 1660
Official source: Form 9423
When I request the agreement.
I request the agreement when the balance is over $50,000 and the payment will be set from a Collection Information Statement; when a business owes payroll tax and a trust fund recovery penalty is possible; when a revenue officer has the case, since IRM 5.14.1.2 notes that an account assigned to Field Collection cannot use the Online Payment Agreement; when the numbers point to a partial payment agreement; and when an agreement is in default. Those cases turn on the type of agreement, the financial statement behind it, and the timing against the levy and lien rules.
An individual who owes $50,000 or less, has filed every required return, and is current on this year's withholding or estimated tax can generally apply online for a simple payment plan without a representative. Online direct debit carries the lowest long-term setup fee. Any taxpayer can also request an agreement by phone without a representative, and Form 9423 says taxpayers may represent themselves at a Collection Appeals Program conference.
Questions
Common questions.
How do I set up an IRS payment plan?
An individual who owes $50,000 or less in combined tax, penalties, and interest, with all required returns filed, may qualify to apply through the IRS Online Payment Agreement tool and receives an immediate decision. An individual who owes less than $100,000 may qualify for a short-term plan of 180 days or less online, with no setup fee. Others can call 800-829-1040, or 800-829-4933 for a business, and an individual can also file Form 9465. The Form 9465 instructions say a request will be denied if any required return has not been filed.
What is IRS Form 9465?
Form 9465, Installment Agreement Request, is the paper form an individual uses to ask for monthly payments on a balance shown on a return or notice. The current form is the September 2020 revision, with instructions revised in July 2024. The form says Form 433-F must be attached when the balance is over $50,000, or when the payment offered is less than the balance divided by 72 and cannot be raised to it. The form itself notes that a balance of $50,000 or less may be handled online for a lower user fee.
How much does an IRS installment agreement cost?
As checked on irs.gov on September 23, 2026, a long-term plan costs $29 online or $107 by phone, mail, or in person with direct debit, and $69 online or $178 by phone, mail, or in person without it. A short-term plan of 180 days or less has no setup fee. A low-income individual pays no fee with direct debit and $43 otherwise, which may be reimbursed if certain conditions are met. Interest and penalties continue in addition to the fee.
Can the IRS levy or file a lien while I am on a payment plan?
Section 6331(k)(2) bars a levy while a request is pending, while the agreement is in effect, for 30 days after a rejection or termination, and during a timely appeal. Treasury Regulation 301.6159-1 lifts that bar on a written waiver, a request made solely to delay collection, or jeopardy. The same regulation lets the IRS file a Notice of Federal Tax Lien and apply refunds to the balance while levy is barred. A guaranteed agreement or a simple payment plan requires no lien determination.
Does an installment agreement affect passport certification?
Section 7345 provides for certifying a seriously delinquent tax debt to the State Department for action on a passport, and the IRS says the State Department generally will not issue a passport after receiving that certification. The statute excludes a debt being paid in a timely manner under a section 6159 installment agreement. The IRS says it will not certify a taxpayer who has an installment agreement request pending, and it lists the 2026 threshold as more than $66,000.
Related pages
Related IRS collections resources.
- IRS collections attorneyUnpaid balances, liens, levies, and hearing rights.
- IRS Form 433-A, 433-B, and 433-FThe Collection Information Statement behind a larger or partial payment agreement.
- Offer vs installment agreementSettle for less or pay over time, compared.
- Alternatives to an offerPartial payment, currently not collectible status, and penalty abatement.
- CP523The notice of intent to terminate an installment agreement and levy.
- LT11 or Letter 1058Final notice of intent to levy and hearing rights.
- Unfiled tax returnsThe IRS denies a payment plan request while a required return is unfiled.
- Trust fund recovery penaltyThe personal penalty for unpaid payroll trust fund taxes.
Send the letter code and the date printed on it.
Tell me the notice code and the date printed on it, the tax years and balance shown, and whether an agreement is already in place or in default. Send only a high-level summary.
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