I set up an IRS installment plan to pay off taxes. Is there a penalty if I don’t adhere to my payment plan and pay off debt early?
There’s no penalty for paying off your IRS payment plan early. In fact, if you pay tax debt quickly, it’s likely the installment plan fee will be waived.
You can avoid the fee by paying the full amount within 120 days. Apply online to specify this option to pay taxes. If you owe more than $50,000, call the IRS at 800-829-1040 to discuss your tax debt options.
If you can’t pay taxes in full amount within 120 days, you’ll have to pay one of these fees for setting up the agreement:
- $52 for a direct debit agreement
- $120 for a standard agreement or payroll deduction agreement
- $43 if your income is below a certain level
Fill out Form 13844 to apply for the reduced user fee.
Related Resources
The IRS has contacted third parties to help figure out what you owe. Learn more about letter 3173 from the tax experts at H&R Block.
Learn more about letter 2269C, why you received it, and how to handle an IRS 2269C letter with help from the tax experts at H&R Block.
Understand the most common types of IRS business tax penalties for filing and paying late, and your possible options for requesting IRS penalty relief.
