- Short-term payment plans of 180 days or less have no setup fee for individuals applying online or by other methods.
- Long-term installment agreements carry setup fees from $29 to $178 depending on direct debit use and application channel, with reduced rates or waivers available for qualifying low-income individuals.
- Interest and penalties continue to accrue until the full balance is paid regardless of the plan selected.
- Changes to an existing plan incur additional fees that can be lower when completed online or with direct debit.
For background on this issue, read our IRS payment plans guide.
IRS Payment Plan Options
The IRS provides short-term payment plans allowing full payment within 180 days or less and long-term installment agreements that involve monthly payments over an extended period. Individuals may apply online for a short-term plan if they owe less than $100,000 in combined tax, penalties and interest. For a long-term plan, individuals may qualify to apply online if they owe $50,000 or less in combined amounts and have filed all required returns.
Business taxpayers generally must call the IRS or visit a Taxpayer Assistance Center rather than apply online. Sole proprietors and independent contractors apply as individuals.
Setup Fees and Payment Methods
Short-term plans have no setup fee for individuals whether applied for online or by phone, mail or in person. Long-term plans include a setup fee to cover processing costs as directed by the Office of Management and Budget.
For long-term plans paid by direct debit from a checking account, the fee is $29 if applied online or $107 by phone, mail or in person. Other payment methods such as Direct Pay, EFTPS, check, money order or debit/credit card result in fees of $69 online or $178 by phone, mail or in person. Debit or credit card payments also incur separate processing fees paid to the processor.
Republic Tax Relief provides private tax-resolution services for individuals and businesses with IRS or state tax issues. Those with existing tax debt questions that fall outside these payment plan options can contact the firm for a free, no-obligation initial consultation to discuss suitability, scope, fees and availability of help communicating with the IRS.
Low-Income Fee Adjustments
Individual taxpayers with adjusted gross income at or below 250 percent of the federal poverty level may qualify for user fee relief on long-term plans entered on or after April 10, 2018. The IRS system automatically applies the appropriate reduced fee when eligibility is identified.
Qualifying low-income individuals entering a direct debit installment agreement receive a full waiver of the setup fee. Those unable to use direct debit pay a reduced fee of $43 that may be reimbursed upon completion of the agreement if certain conditions are met. Applicants who believe they qualify but were not identified as low-income may submit Form 13844 within 30 days of the acceptance letter for reconsideration.
Ongoing Charges and Other Factors
Interest and certain penalties continue to accrue on the unpaid balance until it is paid in full. Paying as much as possible up front reduces these additional charges. Not paying taxes when due can also lead to a Notice of Federal Tax Lien or levy action.
While a payment plan request is pending, the IRS is generally prohibited from levying and the collection period is suspended or extended. Fees for revising an existing plan range from $6 online to $89 by phone, mail or in person, with no fee for changes to an existing direct debit agreement and possible reimbursement for qualifying low-income individuals.
IRS guidance checked .
General information only, not individual tax, legal, or financial advice. Rules, deadlines, and eligibility depend on your circumstances. Check current official guidance or consult a qualified professional.
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