If you owe taxes to the Internal Revenue Service (IRS), you may be eligible to set up an installment agreement to pay off your debt over time. Setting up an installment agreement can help you avoid penalties and interest charges for late payment, but you may be wondering: what is the fee for an IRS installment agreement?
The fee for setting up an IRS installment agreement varies depending on the type of agreement you choose and the method you use to apply. Here’s a breakdown of the fees you may encounter:
Online Payment Agreement
If you owe $10,000 or less in taxes, penalties, and interest, you may be eligible to apply for an Online Payment Agreement (OPA) through the IRS website. The fee for setting up an OPA is:
– $0 if you set up a direct debit installment agreement (DDIA)
– $31 if you set up a standard agreement or payroll deduction agreement
– $149 if you set up a standard agreement or payroll deduction agreement and qualify for a reduced fee
Phone Payment Agreement
If you prefer to apply for an installment agreement over the phone, you can call the IRS at 1-800-829-1040. The fee for setting up a phone payment agreement is:
– $105 if you set up a standard agreement
– $52 if you qualify for a reduced fee
Mail Payment Agreement
If you prefer to apply for an installment agreement by mail, you can fill out Form 9465 and mail it to the IRS. The fee for setting up a mail payment agreement is:
– $120 if you set up a standard agreement
– $43 if you qualify for a reduced fee
Low-Income Payment Agreement
If you qualify as low-income, you may be eligible for a reduced fee of $43 for any installment agreement, regardless of the type or method of application.
In addition to the fees listed above, you may also be charged interest and penalties on the unpaid balance of your taxes. It’s important to make your payments on time and in full to avoid any additional fees or consequences.
In conclusion, the fee for an IRS installment agreement varies depending on the type of agreement you choose and the method you use to apply. The best way to determine your specific fee is to review the IRS website or consult with a tax professional. Remember to make your payments on time to avoid any additional fees or complications.