Note: Individual taxpayers are now eligible for a Simple Payment Plan.
Streamlined installment agreements for businesses are an efficient option for settling a tax debt if you qualify. No collection information statement or a notice of federal tax lien determination is required.
How to qualify
- Still in business with assessed tax debt of $25,000 or less (income tax only)
- Out of business with any type of tax debt of $25,000 or less
- Out of business sole proprietor with any type of tax debt of $50,000 or less. Sole proprietors without employees may qualify for a payment plan as an individual.
- Have filed all required tax returns with the IRS
If you do not meet these conditions see Tax Topic 202 for other payment plan options.
Fees
A “user fee” may be required to set up a payment plan. Applying online results in lower fees. Assuming you qualify online, you’ll also save on postage and not have to call us.
For even lower fees, choose “Direct Debit” as your method of payment to have a monthly payment automatically deducted from your bank account.
Payment terms
Most people have up to 72 months (6 years) to pay off the balance. Sometimes the period is shorter (collection statutes can vary).
You can always pay over a shorter period. You will be charged interest and penalties during the payment period, so choose the highest monthly payment you can afford.
Out of business sole proprietors with employees: if you owe more than $25,000 and are not paying through direct debit from your bank account, IRS may issue a public Notice of Federal Tax Lien that will be visible to other creditors.
How to arrange a payment plan
Businesses who owe $25,000 or less and are able to full pay within 2 years, can set up a payment plan using the Online Payment Agreement application.
If you are unable to apply online, see Tax Topic 202 for other options to submit a payment plan.