Taxpayers looking for IRS Form 9465 instructions are in the right place. After all, scheduling payments may be better than paying all the taxes in one go.
RELATED: What To Do When You Can’t Make This Month’s IRS Installment Payment
In this article:
- Short Primer on IRS Tax Form 9465
- When Not to Use IRS Form 9465 for an IRS Payment Plan Balance
- IRS Payment Agreements
- Installment Agreement User Fees
- How to Answer the IRS 9465 Form
- Where to Mail IRS Form 9465 and How to Pay
IRS Form 9465 Instructions | Helping You Manage Tax Payment
Short Primer on IRS Tax Form 9465
If you have an IRS balance due and can’t pay it all at once, you can file IRS Form 9465 to request a payment plan. The 9465 form sets up a payment plan, which can prevent the possibility of meriting failure to file fees.
Generally, if you are not receiving an IRS refund payment, you owe taxes. Of course, a taxpayer should troubleshoot the tax refund first.
The 9465 form can help taxpayers minimize the risk of back taxes, as most taxpayers pay annually without noticing an increase in tax amounts. This ability to minimize back taxes makes knowing and understanding Form 9465 instructions immensely critical for all taxpayers in case they need to use a payment plan.
You may only be able to get monthly installments if you owe less than $10,000 and you are an individual or a sole proprietor who owes taxes and are no longer in operation.
You can use IRS Tax Form 9465 if you have done your taxes and can’t pay the full amount due on your tax return. Another reason why taxpayers use tax form 9465 is if they receive a notice from the IRS that they owe back taxes.
Taxpayers who want to file for other tax relief options like an Offer In Compromise may also think about using the 9465 form to show a sign of good faith. An offer in compromise, depending on what the IRS and the taxpayer agree on, can apply retroactively which can make future payments lower.
Lastly, some taxpayers may think going into a payment plan with the IRS can affect your credit score. Filing IRS Tax Form 9465 actually won’t show up in your credit score, as the tax debt is being paid albeit in a different method.
When Not to Use IRS Form 9465 for an IRS Payment Plan Balance
Important: If a taxpayer can pay the tax debt in less than 120 days, the taxpayer may save more money doing so rather than pay the set up fees and transaction fees from accomplishing the 9465 form. Also, the IRS only gives a maximum of 72 months or 5 years for a streamlined payment plan.
If you are eligible to use IRS Form 9465, you may not want to under certain circumstances.
If you are able to pay the full amount within 120 days of the due date, don’t file the form – just send in the amount.
You’ll still be charged interest and penalties, but you won’t have to pay the fee to set up a monthly installment agreement.
You will need to call (800) 829-1040 to let the IRS know you will be paying the full amount due within 120 days.
If you want to ask for a payment agreement online, do not file this form. Instead, go to IRS online services to sign up to make your IRS payment online. You’ll have to create an IRS payment login and sign an IRS installment agreement online to make monthly payments on the balance due.
If you have a business and it is still operational, plus you owe unemployment taxes or employment taxes, don’t file the form or use the IRS payment online system. Instead, call the IRS payment phone number.
Other than using the Form 9465, the taxpayer can apply for a payment plan by:
- Calling 1-800-829-1040, which is the IRS taxpayer helpline.
- Applying for a payment plan online using the IRS payment agreement online application. However, only an individual taxpayer with a tax debt of $50,000 or less and business owners with $25,000 or less can apply electronically.
- Employing or talking to a tax specialist, such as a tax attorney or a CPA, to negotiate with the IRS.
Important: For the taxpayer who wants to apply for an online payment plan, they need to prepare:
- Social Security Number and Individual Tax ID Number
- Date of birth
- Current address
- A working e-mail address
- Filing status
IRS Payment Agreements
The catch to the payment agreement is you have to meet certain criteria.
First, you can’t owe more than $10,000. Plus, during the past five years, you have to have filed all of your income tax returns on time and paid any taxes that may have been due on time.
You cannot have an installment agreement in the past five years, and you have to agree to pay the full amount within three years.
Finally, you have to agree to abide by all of the tax laws while the payment agreement is in effect.
Of course, you probably won’t be financially able to pay the amount all at once.
Also, if you owe less than $50,000, bypass this form and apply for an IRS payment agreement online.
Additionally, if you apply for the monthly payments online, the fee the IRS charges for payments is less than if you file IRS Form 9465.
Installment Agreement User Fees
The IRS charges a fee to set up a monthly payment plan. The fees may be different from year to year.
But, if you file for monthly payments online instead of using IRS Form 9465, the fees may be less. Also, you may be eligible for a reduced fee of $43 (current as of March 2018) if your income is low enough.
You’ll have to file IRS Form 13844 to request the lower fee.
The fee is further reduced to $31 if you opt to set up an account online instead of using the form.
You will still be charged late fees and interest on taxes that are not paid on time, even if you do request a monthly payment plan.
To keep the amount charged lower, file your tax return on time and pay as much as you can on the amount due.
RELATED: IRS Form 2848 [Report Power Of Attorney] | Internal Revenue Service
How to Answer the IRS 9465 Form
The 9465 form is actually very easy to understand.
Line 1a requires your identifying information. The taxpayer writes down his or her:
- Social Security number
- Spouse’s name and SSN
- Current address
Line 1b is used for a new address if the taxpayer has moved and the address on record is outdated.
Line 2 is applicable to former business owners. This line is where the taxpayer enters the name of the old business and the corresponding Employer Identification Number.
Line 3 is for communications, i.e. home phone number and work phone number as well as the best time to call.
Lines 5 and 6 are for the original tax debt and new fees, penalties, and additional taxes respectively. Line 7 is the sum of total tax debt.
Lines 8 to 11 relates to the calculation of the monthly payment. Please ensure that the numbers entered in Form 9465 are accurate and realistic.
Line 12 is the date when the payment goes through. Important: Make sure that the date is not higher than 28.
Lines 13 and 14 are exclusive, as the taxpayers either use line 13 for direct debit or 14 for payroll deduction.
Lines 15 to 20 are for additional personal information.
Lines 21 and 22 are for spousal information.
Lines 23 to 27 asks for more information related to monthly expenses, like insurance premiums, car payments, and others.
Where to Mail IRS Form 9465 and How to Pay
If you are filing IRS Form 9465, you can make payments via check, money order, or credit card.
The applicable fee is $225 or, if you sign an online agreement, $149. If you use the form and direct debit, the fee is $107 or $31 if you use the online payment agreement.
And, if you choose a payroll deduction installment agreement, the fee is $225.
If you are mailing payments, mail them to the IRS payment address where you normally file your taxes.
If you are filing the request for payments after you filed your 1040, check the IRS site for the proper address to send the form and payments.
Regardless of whether you request a payment schedule, you still have to pay interest and penalties. Lower those penalties by paying as much as possible with your timely return.
If at all possible, sign up for payments online so that you are able to save some of the fees the IRS charges you to make payments. Here’s where you can download the form.
Meanwhile, here’s a guide on all the IRS forms you may encounter and tax deductions you can avail.
The earlier a taxpayer understands the Form 9645 instructions, the better and faster the payment plan process.
Do you have more questions about the IRS Form 9465 instructions? Post them in the comments section below.
If you owe back taxes, visit taxreliefcenter.org for more information on tax relief options.
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Editor’s Note: This post was originally published on April 9, 2018, and has been updated for quality and relevancy.