Cannot Pay IRS Tax Bill

What are the fees for the IRS installment agreement?

There are three types of one time IRS installment agreement fees depending on income level and method of payment:

• a fee of $105 will be charged when the taxpayer enters into an installment agreement with the IRS
• a fee of $52 will be charged when the taxpayer enters into an installment agreement with the IRS through a Direct Debit from his or her bank account
• a fee of $43 will be charged when the taxpayer enters into an installment agreement with the IRS if the taxpayer has income at or below 250% of the Department of Health and Human Services poverty guidelines

If the IRS installment payment plan needs to be restructured or reinstated, then a use fee of $45  is charged regardless of income level or method of payment.

Can I pay off my IRS tax bill sooner than my payment plan?

Yes. You can pay off your IRS tax bill balance at any time. If you can pay your IRS tax bill in a shorter period of time, you can request an administrative extension of time to pay for up to 120 days. There is no fee for this short time delay payment agreement.

How long can I request an extension to pay my IRS tax bill for?

If the up to 120 days tax payment extension is not enough, a taxpayer can also request a statutory extension of time to pay tax for up to 6 months. However, the taxpayer needs to prove that paying appropriate tax when due will cause him or her undue hardship which is more than just merely inconvenience. In another word, the taxpayer needs to:

• prove that he or she will have substantial financial loss if you pay your tax on the due date.
• submit Form 1127, Application for Extension of Time for Payment of Tax,
• submit a complete statement of all your assets and liabilities at the end of last month; and
• submit an itemized list of money you received and spent for three months before you requested this extension.

How much of my IRS tax bill will I have to pay on the IRS monthly installment agreement plan?

A taxpayer's monthly payment will be based on his or her tax ability to pay and should be an amount that can be paid each month to avoid defaulting.

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