Installment Agreement
An installment agreement is an IRS payment plan that allows taxpayers to pay their tax debt over time in monthly installments, with several types available depending on the amount owed.
Exam Tip
Guaranteed: owe ā¤$10,000, filed/paid on time past 3 years. Streamlined: owe ā¤$50,000, pay within 72 months. User fees: $31-$225 depending on type. Penalties and interest continue accruing.
What is an Installment Agreement?
An IRS installment agreement allows taxpayers who cannot pay their full tax liability to make monthly payments over time. Interest and penalties continue to accrue on the unpaid balance.
Types of Installment Agreements
| Type | Requirements | Terms |
|---|---|---|
| Guaranteed | Owe ā¤ $10,000 | Filed/paid on time past 3 years |
| Streamlined | Owe ā¤ $50,000 | Pay within 72 months |
| Non-streamlined | Owe > $50,000 | Financial disclosure required |
| Partial payment | Cannot pay in full | Reviewed every 2 years |
User Fees
| Setup Method | Fee |
|---|---|
| Online (direct debit) | $31 |
| Online (other) | $130 |
| Phone/mail/in-person | $225 |
| Low-income | Reduced or waived |
Exam Alert
Guaranteed installment agreement: owe $10,000 or less AND filed/paid on time for the past 3 years. Streamlined: $50,000 or less, paid within 72 months. Penalties and interest continue accruing during the agreement. A filed NFTL may still apply.
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Related Terms
Offer in Compromise (OIC)
An Offer in Compromise is an agreement between a taxpayer and the IRS that settles tax debt for less than the full amount owed, available when the taxpayer cannot pay in full or when there is a legitimate dispute.
Enrolled Agent (EA)
An Enrolled Agent is a federally authorized tax practitioner who has earned the privilege of representing taxpayers before the IRS by passing the Special Enrollment Examination (SEE) or through IRS experience.
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