How to Set Up a Payment Plan With the IRS

The basic steps to set up an IRS payment plan

You can set up an IRS payment plan in three ways: online through the IRS website, by phone, or by mail. The online route is fastest — you can complete it in about 15 minutes if you have your Social Security number, tax filing status, and the amount you owe. The IRS will ask you to choose between a short-term plan (120 days or fewer) or a long-term installment agreement, and to pick a monthly payment amount you can afford.

If you cannot pay the full amount within 120 days, you will need a long-term installment agreement. The IRS charges a setup fee (between $31 and $225 depending on the method you choose) and a small monthly interest charge on whatever balance remains. Once your plan is approved, you make monthly payments on the date you select, and the IRS stops collection actions against you while you are current on the plan.

The key difference between the routes is speed and what information you need ready. Online is fastest if you have recent tax documents. Phone takes longer but a representative can answer questions as you go. Mail is slowest but works if you prefer not to use the internet.

Key Takeaways

You can set up a payment plan online, by phone at 1-800-829-1040, or by mailing Form 9465 to the IRS address shown in your notice.
Online setup takes about 15 minutes and requires your Social Security number, filing status, and the amount owed from your tax notice.
The IRS charges a one-time setup fee between $31 and $225, plus monthly interest on your remaining balance.
Short-term plans (120 days or less) have lower fees; long-term plans let you spread payments over several years if you cannot pay faster.
Once approved, you choose the payment date each month, and the IRS pauses collection actions as long as you stay current.

Setting up a plan online through IRS Direct Pay

Go to IRS.gov and search for "Online Payment Agreement" or navigate directly to the payment agreement tool. You will need your Social Security number or Individual Taxpayer Identification Number (ITIN), your filing status from the tax return in question, and the exact amount you owe from your IRS notice. Have your notice in front of you — it shows the balance due and the tax year.

The tool will ask whether you want a short-term agreement (you pay in full within 120 days) or a long-term installment agreement (you spread payments over months or years). If you choose short-term, the setup fee is $31. If you choose long-term, the fee is $225 if you set up automatic monthly payments from a bank account, or $225 if you pay by check or money order each month. The system will calculate how much your monthly payment would be at different amounts and show you the total interest you will pay.

Once you select a payment amount and a monthly due date, the IRS generates a confirmation number. Write this down or print the page — you will need it if you have questions later. Your first payment is usually due within 30 days.

Setting up a plan by phone

Call the IRS at 1-800-829-1040 during business hours (Monday through Friday, 7 a.m. to 7 p.m. your local time). Have your Social Security number, filing status, and the amount owed from your notice ready. A representative will walk you through the same questions as the online tool: whether you want a short-term or long-term plan, and what monthly payment you can afford.

The phone route takes longer — expect to wait on hold and spend 20 to 40 minutes on the call — but a representative can answer questions about your specific situation. For example, if you are unsure whether you can afford a certain payment amount, or if you have questions about what happens if you miss a payment, the representative can explain. At the end of the call, you will receive a confirmation number and details about when your first payment is due.

Setting up a plan by mail with Form 9465

If you prefer to handle this on paper, fill out Form 9465 (Installment Agreement Request) and mail it with your tax notice to the IRS address shown in that notice. The form asks for your name, Social Security number, the tax year and amount owed, and your proposed monthly payment amount. You also choose whether you want the IRS to withdraw the payment automatically from your bank account each month, or whether you will send a check or money order.

Mail the form and your notice together. Processing by mail takes 4 to 6 weeks, so you will not hear back when ready. During that time, continue to avoid other collection actions if possible — do not ignore any other IRS notices. Once approved, the IRS will send you a letter with your confirmation number and the date your first payment is due.

The setup fee is the same as the phone method: $225 for a long-term plan, or $31 for a short-term plan. If you are paying by automatic withdrawal, the fee may be slightly lower in some cases — check the current fee schedule on IRS.gov before you mail the form.

What happens after your plan is approved

Once the IRS approves your plan, you are legally bound to make the payment on the date you chose each month. If you set up automatic withdrawal from your bank account, the payment comes out without you having to do anything. If you chose to pay by check or money order, you send the payment to the address the IRS provides in your approval letter.

The IRS charges interest on your remaining balance every month — this is separate from the setup fee. The interest rate changes quarterly and is set by federal law, not by the IRS. As of early 2024, the rate is around 8 percent per year, but check IRS.gov for the current rate. You will see the interest added to your balance each month on your payment statement.

If you miss a payment, the IRS will send you a notice. If you miss three payments in a row, your plan is cancelled and the IRS can resume collection actions. If your financial situation changes and you cannot afford the payment you agreed to, contact the IRS before you miss a payment — you can request a modification to lower the amount or extend the timeline.

When to choose a short-term plan versus a long-term plan

A short-term plan works if you can pay the full amount within 120 days. This might be because you expect a tax refund, a bonus at work, or money from selling something. The advantage is a much lower setup fee ($31 instead of $225) and no monthly interest charges. The disadvantage is that you have to pay faster, which means a higher monthly payment.

A long-term plan works if you need to spread payments over several months or years. You might choose this if your monthly budget is tight and a smaller payment is more realistic. The setup fee is higher ($225), and you will pay interest on the balance each month, but you have more time and the monthly payment is lower. The IRS does not set a maximum length for a long-term plan — it depends on the amount you owe and the payment you propose. Generally, the IRS expects you to pay within 5 to 6 years, but you can propose a longer timeline if you need to.

Frequently Asked Questions

Can I set up a payment plan if I owe penalties and interest, not just the original tax?

Yes. The amount you owe includes the original tax, penalties, and interest. Your payment plan covers all of it. Interest continues to accrue on the unpaid balance each month, so the longer you take to pay, the more interest you will owe in total.

What if I cannot afford any of the payment amounts the IRS suggests?

Contact the IRS and explain your situation. You can propose a lower monthly payment, and the IRS will consider it. If your income is very low, you may be able to request a Currently Not Collectible status instead, which pauses collection temporarily while you get back on your feet.

Do I have to pay the setup fee upfront, or can I add it to my plan?

The setup fee is usually added to your first payment or included in your plan balance, depending on which method you use. If you set up online or by phone, ask the representative or check your confirmation letter to see how the fee is handled.

What happens if I pay off the plan early?

You can pay off the remaining balance at any time without penalty. straightforward send a check for the full amount to the address on your payment statement, or contact the IRS to arrange a final payment. Paying early saves you interest charges on the remaining months.

Can I change my payment amount or due date after the plan starts?

Yes. Contact the IRS and request a modification. You can lower the payment if your situation has changed, or raise it if you want to pay off the plan faster. The due date can also be moved to a different day of the month if that works better with your paycheck schedule.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.