Levins Tax Law
Schedule your initial consultation:

Experienced and Trusted
Representation From A Tax
Attorney And Former IRS Agent
And "BIG 4" Tax Partner

Photo of Attorney Gerard J. Levins

What are the fees for tax installment agreements?

On Behalf of | Aug 30, 2016 | Tax Controversies

The IRS recently proposed a new fee schedule that would take effect at the beginning of 2017 for taxpayers who enter installment agreements. While the overall fee increases, direct debit and online options will reduce the total you pay.

What are the general requirements to qualify for an installment agreement? You need to owe less than $50,000 in income tax, penalties and interest. You also have to file all required returns.

What will increase?

The federal government is required to charge fees to pay for services that provide a benefit. With a recent review the proposal is to increase the installment agreement fee to $225 from the general $120 fee.

This is basically the bad news. This new rate will apply for those who apply over the phone or by mail with Form 9465.

Benefits of online and direct debit

Is there any good news? Yes and even if you apply in the above ways, you can cut the fee to $107 by using direct debit to pay the monthly payments.

As we are all more connected to the internet than ever, the IRS offers some benefits for using its online tools. An online installment agreement will cost $149. When combined with direct debit the cost is reduced to $31.

There will remain a low-income rate for those suffering economic hardship. The proposed rate is $43. Low-income has been updated and the guidelines for a family of four are total income of approximately $60,000.

When tax debt is unexpected or starts to mount, there are solutions to address the issue. It may be hard to work out a plan, but the problem does not go away on its own. Speaking with a tax attorney is a good way to determine the best route to resolve your tax problem.


FindLaw Network