How to Make a Payment Plan With the IRS
If you owe taxes to the Internal Revenue Service but can't afford to pay the amount you owe all at once, don't panic. Submit a payment plan online to the IRS. The worst thing you can do is not file your tax return, which results in a penalty. If you owe $25,000 or less and file your tax return on time, you can work out a payment plan with the IRS.
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Instructions
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Complete your taxes on time to determine you much you owe the IRS. Postmark the return no later than April 15. Mail the return even though you don't currently have money to pay the entire tax bill.
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Gather the information needed to set up an online payment agreement. If you want to submit the agreement proposal before receiving a bill from the IRS, you need your Social Security number, date of birth, total tax amount from last year, adjusted gross income from last year and the tax amount due this year. You also need your spouse's information, if applicable. If you wait for a bill from the IRS, you won't need the information from last year's tax return.
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Visit the IRS Online Payment Agreement Application website. Read the information on the Web page and then click "Apply for a Payment Agreement." You can apply for a 120-day extension or submit a proposal for monthly installments, which can extend for years if necessary. You accrue fees and interest, but after you pay the original amount owed, you can seek relief from the remaining penalties and interest. The IRS frequently grants this to individuals who have an otherwise clean record with the IRS.
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Receive confirmation from the IRS that your agreement has been accepted.
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Tips & Warnings
Call the IRS at 800-829-1040 if you have questions or need personal assistance.
Don't run away from the IRS because you are scared. Don't avoid filing your taxes. You'll feel much better if you just deal with your tax problem head on.
