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.
Do you want to appoint a third party designee on your tax return? Learn how to include an IRS third party designee with the tax experts at H&R Block.
Learn more about the latest updates for 2019 tax withholding with H&R Block. Find out how your paycheck may be impacted by the new 2018 withholding tables.
Are funds reported on a Form 1099-Q considered taxable by the IRS? Learn more from the tax experts at H&R Block
Learn more about form CP71D, why you received it, and how to handle an IRS CP71D notice with help from the tax experts at H&R Block.