How to Apply for a Payment Plan with the IRS for Taxes Owed

All American citizens in employment or have some source of income,are supposed to pay taxes to the IRS (Internal Revenue Service). However, you may find yourself unable to pay your taxes on time for various reasons which are only known to you.

The good news is that, you can apply for a payment plan with the IRS for taxes owed. In this article, you will discover how to go about the process of applying for a payment plan with the IRS.

It is a fairly easy process to set up a monthly payment plan with the IRS. You can set up a monthly payment installment agreement using the on-line payment agreement web application form or by filling out some paperwork at the IRS offices. IRS has four types of payment installment agreements which you can choose from. Read through all of them and choose one that fits within your budget.

Steps on how to go about the application

1. You need to know how much you owe in taxes, by calling the IRS offices or physically going there and get copies of all your tax returns to verify how much you owe. The amount that you owe includes the original tax due, the penalties and interest. The IRS charges a user set up fee for all applicants who are applying for an installment plan.

This is broken down as follows; $ 52 for direct debit installment agreements, $ 45 for restructuring a defaulted installment agreement, $105 for new installment agreements. For low income tax earners they can request for a lower charge of $ 43.

2. There is a form that you have to fill out, the 9465 form an installment agreement request form. You also have the option of filling out a form on-line which is on the IRS website. You should look out for the online payment agreement application form while on the IRS website.

3. Select the day of the month that you want to make the payments. Make sure that your  payment is on the same day of each month.

4. Next, choose your monthly payment amount, this is the amount that you will paying every month. Choose a minimum amount of money that you are willing to pay each month comfortably.

There are several ways in which you can make the payments either by check, a credit card,or electronic transfers. Automatic withdrawals from your checking account is also another method you can use to make the payments.

If you are paying by check remember that it may take a few days for the check to mature. So make sure that by the time the check matures it falls within the date that you committed yourself to making the payments. Delays in making the payment will attract penalty fees charged by the IRS for defaulting on payments.

After submitting your application, you should expect a response from IRS within a period of 30 days. If the above steps are too much for you, then you can ask a tax professional to help you on how to apply for a payment plan with the IRS.