If you have breached a instalment payment agreement in the past 12 months, the amount you owe is more than $25,000 but not more than $50,000, and the amount on line 11a (11b, if applicable) is less than the amount on line 10, you must complete Part II on page 2 of Form 9465. What happens if the taxpayer does not comply with the terms of the instalment payment agreement? Low-income taxpayers who complete lines 13a and 13b will receive a waiver of their user fees for instalment agreements. For more information, see Waiver and refund of user fees above. On line 11a, enter the amount you can pay each month. Make your payments as large as possible to limit interest and penalties. The fee is valid until you have paid it in full. If you have already entered into a instalment payment contract, this amount must represent the total amount of the proposed monthly payment for all your liabilities. If no payment amount is shown on line 11a (or 11b), a payment will be determined for you by dividing the balance due by 72 months. A payment plan is an agreement with the IRS to pay the taxes you owe within an extended period of time. You should apply for a payment plan if you believe you can pay your taxes in full within the extended period.
If you are eligible for a short-term payment plan, you will not be liable for a user fee. If you don`t pay your taxes when they`re due, it can lead to filing a federal tax lien notice and/or IRS levy lawsuit. See Publication 594, The IRS Collection Process PDF. By approving your application, we agree that you pay the tax you owe in monthly instalments instead of paying the full amount immediately. In return, you agree to make your monthly payments on time. You also agree to comply with all your future tax obligations. This means that you must have enough withholding tax or estimated tax payments to have your tax paid in full for future years if you file your tax return on time. Your application for a instalment payment agreement will be rejected if no required tax return has been filed.
Any refund will be factored into the amount you owe. If your refund is applied to your balance, you will still need to make your regular monthly payment. The user fee exemption or refund applies only to individual taxpayers whose gross income is adjusted, as is the case for the last year for which such information is available, at or below 250% of the applicable federal poverty line (low-income taxpayers) who enter into long-term payment plans (instalment agreements) as of April 10, 2018. If you are a low-income taxpayer, the user fee will be waived if you agree to make payments by direct debit by entering into a Direct Debit Agreement (DDIA). If you are a low-income taxpayer but cannot make payments by electronic direct debit by completing a DDIA, you will be reimbursed for the user fee after entering into the remittance agreement. If the IRS system identifies you as a low-income taxpayer, the online payment settlement tool automatically reflects the applicable fees. Additional text has been added to Form 9465 regarding your payment of tax and your provision of updated financial information upon request. See Requests to modify or terminate a payout agreement below. For the conclusion of a payment contract in instalments, we charge a user fee. The amount of the usage fee may vary depending on whether or not you use the online payment app and want to make your monthly payments. For more information, see the following table. Reduced user fees for certain installment payment agreements.
You can view the details of your current payment schedule (type of agreement, due dates, and amount you need to pay) by logging into the online payment agreement tool. If your outstanding balance does not exceed $50,000, you can request a payment plan online instead of filling out Form 9465. To do this, go to IRS.gov/OPA. If you enter into your instalment payment agreement with the OPA app, the usage fee you pay will be lower than normal. You will be charged interest and a late payment penalty for all unpaid taxes on the due date, even if your request for payment in instalments is granted. Interest and all applicable penalties will be charged until the balance is paid in full. .