If you owe the IRS, there’s no time to lose. If you call the IRS directly you’ll learn they only want to talk about one thing, and that’s how soon you can pay in full. But that’s not your only option. You can pay the IRS in monthly installments or in partial payments.
IRS Streamlined Installment Agreement
If you owe less than $25,000 and do not want the IRS digging into your finances, this may be the best option for you.They base your monthly payment on what would be required to pay your debt in full in five years. In order to apply fill out IRS Form 9465, Installment Agreement Request.
IRS Voluntary Disclosure Installment Agreement
If you owe more than $25,000 or cannot afford to pay the amount offered by the streamlined agreement, you will need to disclose your finances with a Form 433. You could wind up with a very affordable payment plan, but if your form is filled out incorrectly you may pay much more than you truly have monthly. Trust me, defaulting on an IRS payment plan is not something you want to do. This is why I recommend people turn to a tax debt professional to make sure they get the best payment plan for their budget.
IRS Partial Payment Installment Agreement
In a Partial Payment Installment Agreement, the taxpayer makes regular monthly payments to the IRS, but the payments do not pay off the tax debt in full like the other two Installment Agreements do. You make the same affordable payments each month, until your debt expires according to its statute of limitations. Any debt left over is no longer collected upon by the IRS. Although requesting a Partial Payment Installment Agreement with the IRS is trickier than the other two. First, you need to write a letter stating your request for a Partial Payment Installment Agreement and submit it to the IRS along with IRS Form 9465 and IRS Form 433. Again, I suggest that you hire a tax debt professional to help with this.