What Is an IRS Installment Agreement?

If you owe taxes to the IRS but can’t afford to pay the full balance at once, you’re not out of options. This article applies to U.S. federal tax law and explains how an IRS Installment Agreement works — one of the most common and effective ways to resolve back tax debt. TaxRise helps taxpayers who owe back taxes set up IRS payment plans and avoid aggressive collections. An IRS Installment Agreement is a payment plan that allows you to pay your tax debt over time in fixed monthly payments instead of paying it all at once.

What This Means

When you enter an Installment Agreement, the IRS agrees to let you pay down your tax balance gradually. As long as you make your agreed-upon payments on time, the IRS will typically halt collection actions like wage garnishments or bank levies. There are several types of installment agreements, including streamlined plans that don’t require full financial disclosure if you meet certain criteria. The IRS understands that many taxpayers can’t pay large debts in a single lump sum. Installment Agreements provide a way for the IRS to collect what’s owed over time — while giving taxpayers a realistic, manageable way to become compliant without hardship.

Who Qualifies for an Installment Agreement

• Individuals and businesses who owe IRS back taxes
• Taxpayers who want to avoid wage garnishments or levies
• People who can realistically pay some — but not all — of their tax debt
• Self-employed workers and small business owners with variable income

Installment Agreements are available to most taxpayers, though your payment amount, eligibility, and terms depend on your total balance and financial profile.

What Are the Different Types of Installment Agreements?

There are different types of IRS Installment Agreements, including:

1. Guaranteed Installment Agreement

• • • Debt Limit: $10,000 or less
    • Repayment Term: Up to 3 years
    • Setup Fee: Yes (may be waived for low-income)
    • Notes: No financials required; must have 5 years of prior compliance.

2. Streamlined Installment Agreement

• • • Debt Limit: $50,000 or less
    • Repayment Term: Up to 6 years (72 months)
    • Setup Fee: Yes
    • Notes: No financials required; usually needs direct debit.

3. Non-Streamlined (Regular) Installment Agreement

• • • Debt Limit: Over $50,000 or needs more than 6 years to pay
    • Repayment Term: Varies, up to Collection Statute Expiration Date (CSED)
    • Setup Fee: Yes
    • Notes: Requires full financial disclosure (Form 433-A/F).

4. Partial Payment Installment Agreement (PPIA)

• • • Debt Limit: No minimum; typically for large balances that a taxpayer cannot fully pay based on their financial situation
    • Repayment Term: Ongoing until CSED; may not cover full debt
    • Setup Fee: Yes
    • Notes: Requires financials; reviewed every 2 years.

5. In-Business Trust Fund Express Agreement

• • • Debt Limit: $25,000 or less (payroll tax)
    • Repayment Term: Up to 2 years
    • Setup Fee: Yes
    • Notes: For small businesses; must stay compliant on deposits.

To apply for an installment agreement:

• • • Use IRS Form 9465 or apply online at irs.gov
    • Provide financial documentation if required
    • Pay setup fees (waived for low-income taxpayers)
    • Choose between automatic bank withdrawals or manual monthly payments

Important: Even with a payment plan, interest and penalties may still accrue until the full debt is paid off.

How TaxRise Can Help

TaxRise helps taxpayers set up the right type of IRS Installment Agreement based on their budget and financial situation. We make sure you avoid IRS errors and stay protected from collections. If you’re unable to afford the standard monthly payment, you may qualify for a reduced amount under a Partial Payment Agreement.

Schedule your free consultation today and take the first step toward resolving your IRS debt on your terms.

Frequently Asked Questions

• • • Can I set up an IRS payment plan online?
      Yes, you can apply online at IRS.gov for an Installment Agreement.
    • Will the IRS stop collections if I’m on a payment plan?
      Yes. Once your Installment Agreement is approved and in good standing, the IRS typically halts active collections like garnishments and levies.
    • Can I pay off my plan early?
      Yes. You can make extra payments or pay the balance in full at any time without penalty.

---

Reviewed by TaxRise Tax Professionals This article was reviewed by the TaxRise Tax Professional Team. TaxRise has helped thousands of Americans eliminate millions in IRS and state tax debt. This content is for informational purposes only and is not legal or tax advice.