💡 Key Takeaways
- Before you can set up your payment plan, you need to be up-to-date on all tax return filings (no missing returns).
- Setting up your plan is easy with the IRS’s online tool, but not all taxpayers are eligible to use it.
- Get expert help before you apply. A tax professional can help reduce what you owe, file missing returns, and guide you toward the most affordable plan—so you can stop stressing and start moving forward.
Owing a debt you cannot afford to pay is never a good feeling — and it can feel worse when you owe the federal government. The good news is, you can set up a payment plan for taxes, also called an IRS Installment Agreement, to make manageable monthly payments toward your tax balance instead of paying it all up front. A flexible IRS payment plan helps you stay in good standing with the IRS, avoid costly penalties or collection actions, and regain control of your finances—one payment at a time.
Most taxpayers who are not in active bankruptcy and are up-to-date on all tax filings (no missing income tax returns) can set up a tax payment plan with the IRS, allowing them to pay off their liability over time. There are several types of payment plans you can choose from based on your financial situation.
If you’re ready to set up an IRS payment plan, this article will walk you through each step, including instructions on how to fill out the IRS Installment Agreement Form 9465 online or by mail.
What is IRS Form 9465 (Installment Agreement Request)?
Form 9465 is the official IRS payment plan form. File it if you cannot pay your full balance when you file your return or after you receive a bill. You can download Form 9465 PDF from IRS.gov or submit the same request online via OPA (faster and often cheaper).
You’ll provide your identity details (and business info, if applicable), the monthly amount you can afford, your preferred due date, and information about the tax you owe. For balances above $50,000 (or when a streamlined plan isn’t available), you’ll usually include a Collection Information Statement (Form 433-F, 433-A, or 433-B) showing income, expenses, and assets.
Who Should File Form 9465?
You should file Form 9465 if:
- You owe income taxes on your federal return and can’t pay the full amount now.
- You owe employment taxes for a closed business.
- You’re responsible for a Trust Fund Recovery Penalty.
However, you don’t need to file Form 9465 if:
- You can pay the full balance within 180 days.
- You plan to set up a plan through the IRS Online Payment Agreement tool.
- Your business is still operating and owes payroll or unemployment taxes (call the IRS instead).
Fee tips: Setup fees vary by application method and payment type; direct debit generally has the lowest setup fee and helps avoid missed payments. Low-income taxpayers may qualify for reduced/waived fees (see Form 13844).
Before You Set Up Your Payment Plan
Before you can set up your payment plan, you need to have filed all required tax returns and decide which type of plan you want to pursue. There are several types available, which have different costs, benefits, and qualifications. Choosing the right IRS payment plan isn’t just about checking boxes—it’s about finding the option that truly fits your financial reality and long-term goals.
For guidance on which payment plan to choose, read our in-depth guide on How to Choose the Best Type of IRS Installment Agreement for You.
Selecting a plan that fits your financial picture can be difficult. Consulting a tax professional like TaxRise can help you make that decision with confidence. Our experts analyze your full financial picture to determine which plan offers the lowest possible monthly payment, the least long-term cost, and the strongest protection from IRS collections. Take our quick survey and talk to a TaxRise professional today.
How to set up a payment plan with the IRS (online or by mail)
The first step to set up your IRS payment plan is to decide whether to apply online or by mail. While many taxpayers prefer online setup, you may be required to apply by mail with Form 9465 depending on the amount you owe and the type of Installment Agreement you choose.
Read the instructions below to determine which method is best for you.
Apply Online
Use the Online Payment Agreement if you owe $50,000 or less (individuals) or $25,000 or less (businesses). This method is the fastest and simplest way to set up or manage a payment plan. Instead of mailing in Form 9465 and waiting weeks for processing, you can apply online and often receive instant approval if you qualify.
Once your plan is active, the online portal lets you easily adjust your payment amount or due date, switch to Direct Debit for automatic withdrawals, and even reinstate a plan that’s gone into default—all without calling the IRS. You can also view your balance and payment history anytime, giving you complete visibility and control over your agreement from one secure place.
- Create/verify your IRS Online Account
- Choose the type of payment plan you want to set up
- Pick your payment date and amount
Is Online Payment Agreement setup really that easy?
Yes, the IRS Online Payment Agreement tool really does make setup easy. The online system automates what used to be a lengthy approval process, but only for taxpayers who meet strict eligibility rules. If you have unfiled returns, owe more than $50,000, or need a lower monthly payment than the IRS formula allows, your request will be kicked out for manual review with Form 9465 (and sometimes Form 433-F).
Even after approval, missing a future payment or adding new tax debt can default your plan and restart collections. That’s why it’s important to talk to a trusted tax professional about setting up an Installment Agreement. A tax pro can provide a holistic financial review to determine which steps you need to take first, and help choose a payment plan you can truly afford.
TaxRise can help identify opportunities to reduce your tax debt through expert strategy, file any missing returns, and apply for penalty forgiveness before your plan begins—so you’re not paying more than you have to. With guidance from TaxRise, you’ll avoid costly mistakes, ensure compliance, and set up an IRS payment plan that works with your life—not against it. Take our quick survey and receive your free tax consultation today.
Apply by Mail with Form 9465
If you’d rather take the traditional route—or if your situation doesn’t qualify for the online system—you can apply by mail using Form 9465, Installment Agreement Request. The process takes a bit more time, but it’s still straightforward when you follow the instructions carefully. You’ll fill in your personal details, calculate a reasonable monthly payment, choose how you want to pay, and mail the completed form to the IRS. This option is ideal for taxpayers who prefer paper documentation or need to include additional forms—like Form 433-F for higher balances—to show their ability to pay.
- Enter your personal information and the total amount you owe.
- The form instructs you to divide your balance by 72 to estimate a monthly payment (Line 10/11a).
- Select your preferred due date (must be the 1st–28th).
- Choose how you’ll pay:
- Direct Debit from checking (Lines 13a–13b) — the IRS calls this the most convenient way to ensure on-time payments.
- Or Payroll Deduction (check Line 14 and attach Form 2159).
- Low-income applicants unable to use Direct Debit can check Line 13c to have the user fee reimbursed upon completion.
- Sign and mail it to the address listed for your state in the instructions. Attach it to your tax return if you’re filing, or mail it separately if you’ve already filed.
If you owe over $25,000 up to $50,000 and propose a payment at least as high as Line 10, you don’t need to attach Form 433-F—as long as you opt for Direct Debit or Payroll Deduction (Lines 13 or 14). If you owe more than $50,000, you must also submit Form 433-F with the request.
How Are IRS Payment Plans Calculated?
When you request an installment agreement, the IRS uses a simple formula to estimate your monthly payment. The baseline calculation divides the total amount you owe by 72 months, creating a starting point for what your payment should be.
You’re allowed to propose a higher amount if you’d like to pay off your balance faster and minimize the total interest and penalties that accrue over time. However, if the payment you suggest is lower than what the IRS’s formula determines, they may require you to submit Form 433-F (Collection Information Statement) to verify your financial situation before approving the plan.
Current fees
Most IRS payment plan setup fees range from $0 to $178, depending on how you apply and how you pay. Direct Debit is the cheapest, and low-income taxpayers may qualify for waived or reimbursed fees. You can also revise your plan later online for a small fee. Fee policies change; TaxRise can confirm the current amounts in a quick phone call.
Payment Methods You Can Use
- Direct Debit (preferred / often required for higher balances)
- Direct Pay / EFTPS (electronic bank transfers)
- Check / Money Order
- Debit/Credit card (card payments include a separate processing fee)
To see the fees for each type of payment plan, check out our guide on How to Choose the Best Type of IRS Installment Agreement for You
What Happens After You Apply
Once you’ve submitted your application—whether online or by mail—the IRS typically responds within about 30 days by mail. Their response will confirm whether your installment agreement was approved and outline your monthly due date and payment amount.
Keep in mind that even after your plan is accepted, interest and late-payment penalties continue to add up until your balance is completely paid off. You’ll also receive periodic balance statements from the IRS summarizing your remaining debt and payment history.
If you’ve defaulted on an installment agreement in the past 12 months, owe between $25,000 and $50,000, and propose a payment that’s less than the amount calculated on Line 10 of Form 9465, you’ll need to complete Part II of the form before your request can be considered.
Manage Your Plan to Avoid Default
After your installment agreement is approved, consistency is key. Always make your payments on time—setting up Direct Debit from your bank account can help ensure you never miss one. Continue to file all future tax returns on schedule and pay any new balances in full when due, since falling behind again can automatically default your plan.
In the future, if you do miss a payment, it’s not the end of the world—but you need to act immediately to avoid defaulting on your plan. Read our guide on What to Do If You Missed an IRS Installment Agreement Payment.
If your financial situation changes, you can adjust your payment date, change your payment amount, or even switch to a different type of Installment Agreement through the IRS system to stay compliant and in control of your agreement.
For instructions on making changes to an existing Installment Agreement, read our guide: Change Your IRS Payment Plan: How to Revise, Lower, or Cancel Your Monthly Payments
Before You Set Up Your IRS Installment Agreement
Form 9465 might look intimidating, but it’s simply your ticket to breaking your tax debt into manageable monthly payments.
Whether you apply for your Installment Agreement through the IRS Online Payment Agreement or file Form 9465 by mail, the goal is the same—to make your payments affordable, predictable, and penalty-free.
Before you set up an IRS payment plan on your own, it’s worth talking with a tax professional who understands how to look at the full picture—not just the balance you owe.
A skilled specialist can review your financial situation, file your missing tax returns, and uncover tailored tax strategies to reduce your overall debt before a payment plan begins. They can also request penalty forgiveness or explore whether you qualify for programs that help lighten your financial load, such as Offer in Compromise or Currently Not Collectible status. With professional guidance, you’ll know you’re choosing the right path—not the first one that pops up on the IRS website.
At TaxRise, we believe you’re more than your tax balance—you’re someone building a better financial future. Our team of enrolled agents, tax professionals, and case managers works directly with the IRS to ensure your payment plan fits your life, not the other way around.
We’ll simplify the process, help you avoid costly mistakes, and fight for every opportunity to lower what you owe. Because real tax relief isn’t just about setting up monthly payments—it’s about restoring peace of mind and helping you rise above debt, every client, every time. Take our quick survey to receive a free tax consultation and explore all of your tax relief options with a TaxRise professional today.
Frequently Asked Questions
The IRS calculates your monthly payment by dividing your total balance by 72 months, which serves as the baseline for most long-term payment plans. However, the minimum monthly payment depends on your total debt, income, and financial situation. In some cases—especially with a Partial Payment Installment Agreement (PPIA)—you may qualify for a lower amount after submitting Form 433-F to show your financial hardship. Paying more than the minimum can reduce interest and penalties over time.
Yes—if you can’t pay your full tax balance immediately, setting up an IRS payment plan is usually the best move. It protects you from aggressive collection actions like wage garnishment or tax liens, keeps you compliant, and helps you pay down your balance over time. However, it’s smart to consult a tax professional before signing up. They can review your case to see if you qualify for penalty abatement, tax debt reduction programs, or a more favorable option than a standard plan.
Not usually. For taxpayers who owe $50,000 or less and are up to date on all tax filings, setting up an installment agreement is surprisingly straightforward—especially if you apply online. The IRS Online Payment Agreement tool streamlines approvals for most applicants. But if you owe more than the threshold, have missing returns, or need lower monthly payments than the IRS automatically calculates, you’ll likely need to file Form 9465 and Form 433-F by mail, which makes the process more detailed.
Most IRS long-term payment plans can stretch up to 72 months (six years). However, some arrangements, such as Simple Payment Plans or Regular (non-streamlined) agreements, may extend to the end of the IRS’s 10-year collection period if you qualify. The exact length depends on your balance, payment ability, and the form you use (like Form 9465). A tax professional can help you choose the option that balances affordability and long-term savings.
You can contact the IRS directly at 800-829-1040 (for individuals) or 800-829-4933 (for businesses) to set up a payment plan. If you prefer, you can also apply online through the IRS online system or submit Form 9465, Installment Agreement Request by mail. Before you call or apply, make sure you have your most recent tax return, notice, and bank information ready to speed up the process.
Not always. If you qualify, the IRS Online Payment Agreement tool lets you set up your IRS payment plan online without mailing Form 9465. You’ll typically need Form 9465 if you don’t qualify to apply online, owe more than $50,000, or the IRS requests additional information.
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