IRS Online Payment Plans 2023

Pay Now

• $0 setup fee
• No future penalties or interest added

Pay amount owed in full today directly from your checking or savings account (Direct Pay)  or by check, money order or debit/credit card.
Fees apply when paying by card.

Short-term Payment Plan (120 days or less)

• $0 setup fee
• Plus accrued penalties and interest until the balance is paid in full

After applying for a short-term payment plan, you can pay the amount owed directly from your checking or savings account (Direct Pay) or by check, money order or debit/credit card.
Fees apply when paying by card.

Long-term Payment Plan (Installment Agreement)  (Pay monthly)

Pay monthly through automatic withdrawals

• $31 setup fee (low income: setup fee waived)
• Plus accrued penalties and interest until the balance is paid in full

Pay amount owed through Direct Debit (automatic payments from your checking account), also known as a Direct Debit Installment Agreement (DDIA). This is required if your balance is more than $25,000.
Pay each month (non-Direct Debit)

• $149 setup fee (low income: $43 setup fee that may be reimbursed if certain conditions are met)
• Plus accrued penalties and interest until the balance is paid in full

After applying for a long-term payment plan, pay amount owed through non-Direct Debit (not automated) monthly payments, including payments directly from your checking or savings account (Direct Pay) or by check, money order or debit/credit card.
Fees apply when paying by card.

Revise an Existing Payment Plan (Installment Agreement) or Reinstate After Default

• $10 fee, which may be reimbursed if you are identified as low income and certain conditions are met.

IRS payment plans, also known as installment agreements, offer several advantages for taxpayers who owe back taxes but are unable to pay the full amount immediately. These payment plans are designed to help individuals and businesses fulfill their tax obligations while managing their financial circumstances. Here are some key advantages of IRS payment plans:

1. Affordable Payments: Payment plans allow taxpayers to spread their tax debt over a specified period, making it more manageable to budget for regular payments. The IRS considers your financial situation when determining the monthly payment amount, which helps prevent financial hardship.
2. Avoid Collection Actions: Entering into an IRS payment plan can help prevent more aggressive collection actions, such as wage garnishment, bank levies, or asset seizures. As long as you meet the terms of the agreement, the IRS generally suspends collection activities.
3. Maintain Good Standing: Complying with an installment agreement helps you remain in good standing with the IRS. It demonstrates your commitment to resolving your tax debt and can positively impact your credit score and financial reputation.
4. Flexible Terms: The IRS offers different types of payment plans, including short-term (120 days or less) and long-term (more than 120 days) plans. Taxpayers can choose the plan that best fits their financial situation.
5. Reduced Penalties: If you enter into an installment agreement, you may be eligible to request a reduction in certain penalties, such as the failure-to-pay penalty. While interest continues to accrue on the unpaid balance, penalty relief can result in cost savings.
6. Avoid Additional Costs: Failing to pay your tax debt on time can lead to additional costs in the form of penalties and interest. By entering into an IRS payment plan, you can stop the accrual of some penalties, potentially saving money in the long run.
7. Structured Approach: Payment plans provide a structured approach to resolving your tax debt. You’ll have a clear payment schedule and a set date by which your debt will be fully paid, helping you stay on track.
8. Avoid Negative Impact on Credit Score: While a tax lien may be filed when you enter into a payment plan, it’s typically not reported to credit bureaus. This means that your credit score may not be negatively affected, as long as you make your payments as agreed.
9. Easier to Budget: Knowing the exact amount and due date of your monthly payments makes it easier to budget and plan your finances accordingly.
10. Temporary Financial Relief: Payment plans can provide temporary financial relief, allowing you to address other financial priorities while still meeting your tax obligations.