I have a balance due on my return and can’t pay it. Can I set up an IRS payment plan?
To set up a tax payment plan or tax payment installment agreement is among the more costly options to pay your balance due. You might want to consider other less expensive options, including:
- Pay by credit card.
- Borrow from your 401(k).
- Take out a personal loan.
- File for a short-term extension — up to 120 days. This option has:
- No fee
- Penalty of 0.5% per month on unpaid balance
- Interest of short-term federal rate plus 3% (interest might change each quarter)
- Complete IRS Form 1127: Application for Extension of Time for Payment of Tax Due to Undue Hardship.
If you want to request an installment agreement:
- Request an installment agreement with one of these:
- Online payment agreement (OPA)
- Form 9465 — If your liability is more than $50,000, you’ll need to file Form 9465 instead of using the online agreement. You must agree to pay the full amount within three to five years.
- Pay an application fee of $120 ($52 if you make your payments by direct debit). You might qualify to pay a reduced fee of $43 if your income is below a certain level.
If you need to complete a W-9 tax form, you may be asking what it’s used for and why it’s needed. We explain the purpose and use of an IRS W-9 form.
The IRS will usually audit a tax return within three years after the return was filed. Learn more about IRS audit procedures from the experts at H&R Block.
Do you need to call the IRS? Get the IRS phone number and learn what you need to know before calling from the tax experts at H&R Block.