This page provides general educational information only. It is not tax, legal, or financial advice. For official payment plan information, visit IRS — Payment Plans, Installment Agreements.
What is an IRS installment agreement?
An IRS installment agreement (IA) is a formal arrangement with the Internal Revenue Service that lets you pay a tax balance in monthly payments rather than all at once. It does not reduce the underlying tax owed, nor does it stop interest from accruing — but it generally prevents enforced collection actions (such as levies) while the agreement is pending or in effect. Source: IRS — Payment Plans, Installment Agreements (enforced collection generally not taken while a request is pending or a plan is in effect) and IRM 5.14.2.1.2, Authority (IRC 6331(k): no levy while installment agreements are pending or in effect).
Official source: IRS — Payment Plans, Installment Agreements
Types of IRS installment agreements
Guaranteed Installment Agreement
Available to individual taxpayers who owe only $10,000 or less in income tax (penalties and interest excluded), have not failed to file any income tax return or pay any tax shown on it during the preceding five taxable years, have not had an installment agreement in the previous five years, and remain in compliance with all filing and payment requirements during the term of the agreement. If you meet these conditions, the IRS is required to accept your installment agreement proposal. Payments must be made in full within three years or before the CSED, whichever is earlier. Source: IRS — Internal Revenue Manual 5.14.5, Guaranteed Installment Agreements. Threshold as stated in IRM 5.14.5.3 (07-21-2026); verify current thresholds on IRS.gov.
Simple Payment Plan (formerly Streamlined Installment Agreement)
Available for balances up to $50,000 (individual taxpayers, out-of-business sole proprietors, and business taxpayers with BMF non-trust fund liabilities) with full payment required by the Collection Statute Expiration Date (CSED). A Collection Information Statement (CIS) is not required when the account meets the criteria for a Simple Payment Plan. Source: IRS Payment Plans; IRS Internal Revenue Manual 5.14.5, Simple Payment Plans. Threshold as stated in IRM 5.14.5.2 (07-21-2026); verify current limits on IRS.gov.
Non-Simple Installment Agreement (NSIA)
Applies when the account does not qualify for a Guaranteed Installment Agreement or a Simple Payment Plan. A Simple Payment Plan requires an aggregate unpaid balance of assessment of $50,000 or less (individual taxpayers, out-of-business sole proprietors, and business taxpayers with BMF non-trust fund liabilities; the separate Business Trust Fund variant is not covered on this page). For taxpayers who do not qualify for either, the IRS secures a complete Collection Information Statement (CIS) and determines a plan based on it. The IRS analyzes your income and allowable expenses to set a monthly payment that reflects your ability to pay. Source: IRM 5.14.5.1.7 (Acronyms: NSIA = Non-Simple Installment Agreement) and IRM 5.14.5.2; IRM 5.14.1.2(3), 5.14.1.4(2) and 5.14.1.4(4).
Partial Payment Installment Agreement (PPIA)
If you cannot pay the full balance before the Collection Statute Expiration Date (CSED — generally 10 years from assessment), the IRS may accept monthly payments lower than what would be needed to pay the debt in full. A financial statement is required. Source: IRS — Internal Revenue Manual 5.14.2, Partial Payment Installment Agreements.
Key terms defined
Collection Statute Expiration Date (CSED)
The IRS generally has 10 years from the date a tax is assessed to collect it. After the CSED, the IRS’s ability to collect that balance expires. Certain actions can toll (pause) this period, including filing bankruptcy, submitting an Offer in Compromise, or requesting a Collection Due Process hearing. Source: Time IRS can collect tax.
Currently Not Collectible (CNC)
If the IRS determines you have no ability to pay based on your income and necessary living expenses, it may place your account in Currently Not Collectible status. Collection activity stops temporarily, but the debt remains and the CSED continues to run. The IRS will review the account periodically. Source: IRS — Temporarily Delay Collection.
Offer in Compromise (OIC)
A program that allows taxpayers to settle a tax liability for less than the full amount owed, when paying the full amount would create financial hardship or there is doubt about what is owed. The IRS uses strict financial formulas to determine the minimum offer amount it will accept. Most OIC applications are rejected; acceptance is not guaranteed. Source: IRS — Offer in Compromise.
What an installment agreement does and does not do
| What it does | What it does not do |
|---|---|
| Generally prevents IRS levies while the agreement is pending or in effect. The IRS may still file a Notice of Federal Tax Lien. | Stop interest from accruing on the balance |
| Reduces failure-to-pay penalty rate from 0.5% to 0.25% per month while active, if you are an individual who filed your return by its due date and have an approved payment plan | Reduce the underlying tax debt |
| Provides a structured repayment timeline | Automatically release existing federal tax liens |
Source: IRS Tax Topic 653 — IRS Notices and Bills, Penalties, and Interest Charges. Penalty row: IRS — Failure to Pay Penalty. Levy and lien row: IRS — Payment Plans, Installment Agreements; IRM 5.14.2.1.2, Authority (IRC 6331(k)); and TAS — Installment Agreements (the IRS may still file a Notice of Federal Tax Lien after it agrees to an installment agreement).
How to apply
Online: IRS Online Payment Agreement — for individuals who owe $50,000 or less and have filed all required returns.
By phone: Call the number on your most recent IRS notice.
By mail: Form 9465 (Installment Agreement Request) — IRS Form 9465.
When professional help is appropriate: If your balance exceeds $50,000, if you are self-employed and owe employment taxes, if you are considering a Partial Payment IA, an Offer in Compromise, or Currently Not Collectible status, or if you have received a levy or lien notice, a credentialed tax professional — enrolled agent, CPA, or tax attorney — can evaluate all resolution options and represent you. Verify any California-based preparer before hiring.
Frequently asked questions
Does an installment agreement prevent a federal tax lien?
Not necessarily. The IRS may still file a Notice of Federal Tax Lien during an installment agreement. Source: IRS — Federal Tax Lien; IRM 5.14.5; TAS — Installment Agreements.
What if I miss a payment?
The IRS may default the installment agreement. There may be a reinstatement fee if your plan goes into default. If you cannot make a scheduled payment, contact the IRS to change your existing agreement. Source: IRS — Payment Plans, Installment Agreements.
Is there a user fee for setting up a payment plan?
Yes. The IRS charges a setup fee that varies by how you apply and whether you pay by direct debit. Fee amounts are subject to change; current fees are listed at IRS.gov — Online Payment Agreement. Low-income taxpayers may qualify for reduced fees or fee waivers.
Does California have a similar payment plan program?
Yes. The California FTB offers installment agreements for state tax balances. See FTB — Payment Plans. Federal and California payment plans are separate agreements with separate agencies.
Not reviewed by a credentialed tax professional. Dollar thresholds cited are from IRS guidance: IRM 5.14.5 (effective 07-21-2026) and the IRS payment plans page (last reviewed 13-Aug-2026); verify on IRS.gov before relying on specific amounts. Official source: IRS.gov.