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When To Use An IRS Payment Plan Form

Feature | When To Use An IRS Payment Plan Form | IRS payment plan form

The IRS payment plan form, or better known as Form 9465, is used to request an installment agreement. Taxpayers need to fill out this form with their personal info such as name, employer’s address and bank, the total amount owed, and an estimate of the monthly payment they can afford. Also, included in this form are the dates they prefer to pay their tax debt. To find out more about the IRS payment plan form, read the article below!

IRS Payment Plan Form | Right Time to Fill Out Form 9465

 

What is an IRS Payment Plan?

An IRS payment plan is an agreement between the taxpayer and the IRS to settle the taxes they owe on a monthly basis until the entire amount is paid. It is often used when a taxpayer will not be able to pay the full amount on or before the deadline. When you request a payment plan, you have to pay the IRS in full within the given time frame. There will be no user fee if you qualify for a short-term payment plan.

When Shall I Consider an Installment Agreement?

There are scenarios when you’ll need an installment agreement. The first scenario is when you think you can’t pay the taxes you owe in full on time. Next, it is when the IRS turns down your Offer in Compromise. Offer in Compromise is an understanding between taxpayers and the IRS that they will pay their tax debts for a reduced amount. The last common scenario is when you can’t secure a loan with lower interest to pay the tax debt.

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How to Request an Installment Agreement?

How to Request an Installment Agreement? | When To Use An IRS Payment Plan Form
An installment agreement will depend on two things —your full debt balance and your current financial situation. If you are opting to request an installment agreement with the IRS, there are several ways you can do this:

  • You can call the IRS tax helpline at  1-800-829-1040.
  • Use the IRS payment agreement online application. Individual taxpayers who owe $50,000 or less and business owners who owe $25,000 or less can use this method.
  • You can request an installment agreement by mailing the Form 9465.
  • Contact a tax professional, such as a tax attorney or a CPA to negotiate with the IRS.

What is Form 9465?

Form 9465 is a request form to set up a payment agreement. If the taxpayer doesn’t want to phone the IRS or is not able to use the IRS online tool for a payment plan, then they can use this form. If you happen to have a debt of $50,000 or more, you must use this form. You are not allowed to pay online if you owe this much.

You can also use the Form 9465 to add your new tax liabilities to the payment plan you’re currently in. However, if you can settle your debt within the next 120 days of the tax filing deadline, then you don’t have to use this form no matter how much you owe.

What are the Fees for Form 9465?

As of 2017, a taxpayer has to pay $225 to set up a payment agreement using Form 9465. But if you want to settle your payments using direct debit, it will just cost $107. If your current income is lesser than the threshold, the IRS might qualify you for a reduced fee where you only have to pay $43. However, applying online and using IRS Direct Pay will only amount to $31. It is, by far, the most affordable way to get this form.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

How Long is the Response Time?

According to the IRS, the response time varies. But most of the time, taxpayers can receive an answer within thirty days. If you filed a tax return after March 31 and request an installment agreement in April, expect a slower response time. If you didn’t receive any reply from the IRS and your proposed payment date comes, it is better to pay your stated amount.

 

Watch this video from True Resolve Tax Professionals and learn the step by step instructions to complete IRS Form 9465! 

Filling out Form 9465 can give you more time to settle your tax debts as long as the IRS approves your request. Nonetheless, do know an installment agreement will not waive the penalties and interest; rather it will only deter the IRS from doing more collection procedures.

Have you used an IRS payment plan form before? Share your experiences with us in the comments below! 

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