Setting up a payment plan with the IRS can be a straightforward process, but it is important to understand the different options available and the requirements for each. Here are the steps for setting up a payment plan with the IRS:
- Determine your eligibility: Before setting up a payment plan, it is important to determine if you are eligible. In general, individuals and businesses that owe taxes to the IRS and cannot pay the full amount by the deadline may be eligible for a payment plan.
- Gather your financial information: You will need to provide the IRS with information about your income, expenses, and assets to determine the terms of your payment plan. This includes your income tax returns for the past two years, bank statements, and other financial documents.
- Apply for a payment plan: You can apply for a payment plan online, by phone, or by mail. When applying, you will need to provide your financial information and indicate how much you can afford to pay each month.
- Choose the type of payment plan: The IRS offers several different types of payment plans, including short-term, long-term, and installment agreements. Short-term plans are for taxpayers who can pay off the balance within 180 days, while long-term plans are for those who need more than 180 days to pay off the balance. An installment agreement is a payment plan that allows you to pay your balance in monthly payments over a period of time.
- Make your payments: Once your payment plan is approved, you will be required to make regular payments on time to avoid defaulting on the plan. The IRS offers multiple options to make payments such as by mail, online, or by phone.
- File and pay taxes on time: If you have a payment plan, it is important to file your tax return on time and pay any taxes that are due while you are on the plan. If you do not file and pay on time, the IRS may default your agreement and take collection action.
Calling the IRS
You may also request a payment plan by calling the toll-free number on your bill, or if you don’t have a bill, call us at 800-829-1040 (individuals) or 800-829-4933 (businesses).
Before you call, make sure you have all of the information that you need.
- Social Security card and birth date
- Social Security number (SSN)
- Filing status – Single
- Your prior-year tax return. They may need to verify your identity before answering certain questions.
The IRS telephone number is 1-800-829-1040, and they are available from 7 a.m. – 7 p.m. Monday thru Friday. The best time to call is early in the morning.
The first question the automated system will ask you is to choose your language.
- Once you’ve set your language, do NOT choose Option 1 (regarding refund info). Choose option 2 for “Personal Income Tax” instead.
- Next, press 1 for “form, tax history, or payment”.
- Next, press 3 “for all other questions.”
- Next, press 2 “for all other questions.”
- When the system asks you to enter your SSN to access your account information, do NOT enter anything.
- After it asks twice, you will be prompted with another menu.
- Press 2 for personal or individual tax questions.
- Finally, press 4 for all other inquiries. The system should then transfer you to an agent.
It’s important to remember that failure to pay taxes on time can result in penalties and interest charges that can add up quickly, so it is crucial to establish a payment plan as soon as possible if you are unable to pay your taxes in full.