What IRS Form 433-D (2024) Is For
IRS Form 433-D (2024) is the official installment agreement document the Internal Revenue Service uses to finalize a taxpayer’s long-term payment plan for federal taxes. The form records monthly payments, total balance owed, penalties and interest, and the payment date selected for withdrawals. It also confirms checking account information, including the routing number and account number, when a taxpayer chooses direct debit payments. Individual taxpayers use this form to document payment plan details, verify financial information, and authorize the IRS to collect future payments securely for outstanding tax debt.
For an overview of payment plan options for IRS debt, see our complete guide to payment plans.
When You’d Use IRS Form 433-D (2024)
A taxpayer may need IRS Form 433-D (2024) in several situations involving unpaid taxes and payment arrangements.
- New Payment Plan Request: You will use this form after submitting an installment agreement request and receiving IRS approval, as it formalizes all payment plan details and confirms how payments will be collected.
- Amended tax return creating new balance: You may receive this form when your tax return or amended filing results in additional tax debt that you cannot pay in full and must place under an installment agreement.
- Existing Payment Plan Modification: Use this form to update an existing payment plan if there have been changes to your bank information, payment date, or financial situation.
- Multiple tax periods owed: You may receive this form when several years of federal taxes are combined into a single agreement and the IRS requires complete verification of all filing requirements.
- Short-term payment plan conversion: Use this form when your short-term payment plan is no longer sufficient, and your balance needs to be transferred to a long-term payment structure.
Key Rules or Details for 2024
Several important rules apply to IRS Form 433-D (2024) and help determine how a taxpayer qualifies for an installment agreement.
- Balance limits for streamlined agreements: Individual taxpayers may qualify for a streamlined installment agreement if they owe up to $50,000 in combined tax penalties and interest, as the IRS allows approval without a collection information statement.
- Short-term plan threshold: Taxpayers who owe up to $100,000 in combined tax may qualify for a short-term payment plan that does not require a long-term installment agreement or associated user fees.
- User fees based on application method: The IRS charges different user fees depending on whether a taxpayer applies online, by mail, or by phone. The lowest fee applies when taxpayers use the online payment agreement with direct debit automatic withdrawals.
- Low-income taxpayer status: Low-income taxpayers may be eligible for reduced or waived fees after verifying their income eligibility. The IRS may request additional forms before confirming the fee adjustment.
- Direct debit requirement for lower fees: The IRS offers reduced fees when taxpayers authorize direct debit payments from a checking account, which helps prevent missed payments and limits additional interest charges.
You may also qualify for penalty abatement programs if your situation meets IRS criteria.
Step-by-Step (High Level)
The process for completing IRS Form 433-D (2024) follows several clear steps for taxpayers who qualify for a payment plan.
- Determine eligibility: The taxpayer reviews their balance and payment history, confirms filing compliance, and checks whether they qualify for a payment plan online or through an alternative submission method.
- Submit an installment agreement request: The taxpayer uses online tools or Form 9465 to submit an installment agreement request, allowing the IRS to begin reviewing financial information and determining payment eligibility.
- Receive and review agreement: The taxpayer receives IRS Form 433-D (2024) by mail or through their online account and reviews all payment plan details, including the payment date, total balance, and account information.
- Provide bank information: The taxpayer enters their checking account details, including the routing number and account number, to authorize direct debit payments and verifies every item to reduce the risk of transaction issues.
- Sign and return the form: The taxpayer signs the form, confirms the listed address, and returns the completed agreement to the IRS by the date specified in the notice so that the payment plan can become active.
Common Mistakes and How to Avoid Them
Several common errors can delay processing or cause an installment agreement to default, but they can be avoided with careful attention to detail.
- Missing monthly payments: Taxpayers may fall behind when payments are not made on time. They can avoid this by enrolling in direct debit payments and reviewing their recent payment activity through their online account.
- Incorrect bank details: Some taxpayers enter inaccurate routing or account numbers. They can avoid this by verifying all payment information before submitting the form.
- Not filing future tax returns: Agreements can default when taxpayers fail to file new tax returns; they can avoid this by monitoring filing deadlines and paying any new taxes owed in full.
- Ignoring IRS notices: Taxpayers may miss essential updates if they overlook letters sent by the IRS. They can avoid this by keeping their address current and reviewing each notice promptly.
- Not updating financial changes: A taxpayer may experience changes in income or expenses; they can avoid default by contacting the IRS as soon as their economic situation changes.
- Using the wrong payment method: Some taxpayers attempt to pay by money order when a direct debit is required. They can avoid this by following the payment instructions listed on the form and in the IRS notice.
Staying compliant by resolving unfiled tax returns is essential to maintaining an active agreement.
What Happens After You File
Once a taxpayer submits IRS Form 433-D (2024), the IRS activates the agreement and begins processing monthly payments according to the selected payment date. If direct debit payments are authorized, the IRS begins withdrawals using the routing number and account number provided. Future refunds are applied to the total amount owed, and penalties and interest continue to accrue until the balance is paid. The taxpayer can review the balance and payment history through an online account, verify recent payment activity, and contact the IRS if any issues arise. The locked padlock icon shown in the online portal indicates a secure submission.
Use our IRS Account Transcript Service to track your payment plan progress and verify balances.
FAQs
How long does it take the IRS to activate a long-term payment plan under Form 433-D?
It usually takes the IRS several weeks to activate the agreement, depending on how the taxpayer submitted the form and whether the IRS needs additional information.
Can a taxpayer change the payment date after a direct debit installment agreement is active?
A taxpayer can request a new payment date, but the IRS must approve the change, and it may take one billing cycle to update. If you have both federal and state tax debt, explore our state tax relief solutions for a holistic approach.
Does IRS Form 433-D require Social Security details?
The form requires taxpayers to provide their Social Security Numbers so the IRS can match the installment agreement to the correct account.
Can a business use Form 433-D?
Businesses may use similar installment agreement procedures, but most business accounts require different IRS forms or financial reviews.
Will penalties and interest continue after submitting IRS Form 433-D?
Penalties and interest continue to accumulate until the full balance is paid, even when the taxpayer makes every scheduled payment.
