If you owe taxes to the IRS but can't pay the full amount immediately, Form 9465 provides a formal way to request a monthly payment plan. This guide explains everything you need to know about requesting an installment agreement so you can pay your tax debt over time while avoiding more serious collection actions.

What Form 9465 Is For

Form 9465 is the IRS's official Installment Agreement Request form that allows taxpayers to set up a monthly payment plan when they cannot pay their tax debt in full by the due date. This form lets you propose a payment amount and schedule that fits your financial situation, typically spreading payments over several years rather than paying everything at once. IRS.gov

You can use Form 9465 if you're an individual taxpayer who:

• Owes income tax on your Form 1040 or 1040-SR
• May be responsible for trust fund recovery penalties
• Owes employment taxes from a sole proprietor business that's no longer operating
• Owes an individual shared responsibility payment under the Affordable Care Act (for months before January 1, 2019)

The form essentially asks the IRS to accept smaller monthly payments instead of demanding immediate full payment, helping you avoid more aggressive collection actions like bank levies or wage garnishments. Instructions for Form 9465

When You’d Use Form 9465

Late/Amended Situations

You typically file Form 9465 in one of two situations:

1. With your original tax return

If you're filing your return and realize you can't pay the full amount owed, attach Form 9465 to the front of your return before mailing it to the IRS.

2. After receiving an IRS notice

If you've already filed your return or received a balance due notice from the IRS, you can file Form 9465 separately in response to that notice. This is the most common scenario—taxpayers often don't realize they need a payment plan until they receive a bill.

For amended returns, if filing an amended Form 1040-X creates or increases a tax liability you can't pay immediately, you would file Form 9465 after the amended return is processed and you know the final amount owed. IRS.gov Payment Plans

Important Timing Note

While Form 9465 is pending, the IRS generally cannot levy your assets (seize your bank accounts or property), and the collection statute of limitations is suspended. However, interest and penalties continue accumulating, so it's always better to pay as much as possible upfront and request the smallest feasible monthly payments.

Key Rules You Should Know

Eligibility Thresholds

If you owe $50,000 or less in combined tax, penalties, and interest, you may not need Form 9465 at all—you can apply online through the IRS's Online Payment Agreement (OPA) tool for a reduced setup fee. If you owe more than $50,000, you'll need to complete Form 9465 and likely provide a Collection Information Statement (Form 433-F) detailing your finances. Instructions for Form 9465

Short-Term vs. Long-Term Plans

If you can pay in full within 180 days, request a short-term payment plan with no setup fee. If you need longer than 180 days, you're requesting a long-term installment agreement, which carries a setup fee ranging from $22 to $178 depending on your payment method and how you apply.

Guaranteed Approval Criteria

You qualify for automatic approval if you owe $10,000 or less, have filed and paid all taxes on time for the past five years, haven't had an installment agreement for income tax during that period, agree to pay within three years, and can't afford to pay immediately.

Streamlined Agreements

For debts between $10,001 and $50,000, streamlined installment agreements don't require detailed financial disclosure if you agree to pay the balance within 72 months and make payments via direct debit. IRS.gov Payment Plans

Compliance Requirements

To maintain your agreement, you must file all future tax returns on time, pay all future taxes when due, and make every monthly payment on schedule. Failure to comply can result in default and termination of your agreement, after which the IRS can resume collection actions.

Step-by-Step (High Level)

Here's the basic process for requesting an installment agreement:

Step 1: Determine your eligibility

Calculate your total tax debt including penalties and interest. If you owe $50,000 or less, consider applying online instead. If you owe more than $100,000 or your business still operates, you'll need to call the IRS directly rather than using Form 9465.

Step 2: Calculate your monthly payment

Determine how much you can realistically afford to pay each month. The IRS requires you to propose a payment amount that will satisfy your debt within 72 months or before the 10-year collection statute expires, whichever comes first. If your proposed payment won't pay off the debt in time, you'll need to complete Form 433-F to document your financial hardship. Instructions for Form 9465

Step 3: Complete the form

Fill in your personal information (lines 1-2), the tax periods you owe (line 3-4), the total amount owed (lines 5-7), any payment you're including (line 8), and your proposed monthly payment amount and due date (lines 11-12). If you're setting up direct debit payments—which qualifies you for the lowest setup fee—complete lines 13a and 13b with your bank routing and account numbers.

Step 4: Submit the form and initial payment

If filing with your tax return, attach Form 9465 to the front and include the largest payment you can afford. If filing separately, mail it to the appropriate IRS address for your state (listed in the form instructions) along with any payment. You can also make payments electronically through IRS Direct Pay, EFTPS, or other methods. Where to File Form 9465

Step 5: Wait for IRS response

The IRS typically responds within 30 days (longer during peak filing season) to approve or deny your request. If approved, they'll send a notice with your agreement terms and setup fee amount. If you haven't heard back by your first payment date, make the payment anyway to the address in the instructions.

Common Mistakes and How to Avoid Them

Mistake #1: Proposing unrealistically low payments

Many taxpayers propose tiny monthly payments hoping to minimize their financial burden, but payments must be sufficient to pay off the debt within 72 months. Solution: Use the formula (total debt ÷ 72) to calculate the minimum monthly payment. If you truly can't afford this amount, you must complete Form 433-F to demonstrate financial hardship.

Mistake #2: Not filing all required tax returns first

The IRS will automatically reject your installment agreement request if you have unfiled tax returns for any required years. Solution: File all delinquent returns before submitting Form 9465, even if you can't pay the tax owed on those returns. Instructions for Form 9465

Mistake #3: Missing the direct debit option

Many taxpayers choose standard payment methods without realizing direct debit (automatic bank withdrawals) dramatically reduces the setup fee—from $178 to $107 when applying by mail, or from $69 to $22 when applying online. Solution: Complete lines 13a and 13b unless you absolutely cannot provide bank account information.

Mistake #4: Continuing to accumulate new tax debt

Taxpayers often assume their installment agreement covers future years, but it only applies to the specific tax periods listed on Form 9465. If you don't adjust your withholding or estimated tax payments, you'll owe again next year and your agreement may be terminated. Solution: Review your withholding using the IRS Tax Withholding Estimator and submit a new Form W-4 to your employer if needed. IRS.gov Payment Plans

Mistake #5: Ignoring the form when you could pay in 180 days

If you can pay your full balance within six months, don't use Form 9465—call the IRS at 800-829-1040 to arrange a short-term payment plan with no setup fee. Solution: Honestly assess whether borrowing from a bank, using a credit card, or liquidating assets would allow you to pay within 180 days, potentially saving you hundreds of dollars in setup fees and interest.

What Happens After You File

During the review period

Once the IRS receives your Form 9465, several things happen:

While your request is pending (typically 30 days), the IRS generally cannot levy your bank accounts or wages. The 10-year statute of limitations on collecting your debt is also suspended, giving the IRS more time to collect after your payment plan ends. Continue making payments if you can, and file any required tax returns to demonstrate compliance. IRS.gov Payment Plans

If approved

You'll receive a notice detailing your payment amount, due date (you choose between the 1st and 28th of each month), and the setup fee. If you set up direct debit, payments will automatically withdraw from your bank account—you won't receive monthly bills, just an annual statement. If paying by other methods, you'll receive a monthly payment coupon. Your refunds from future tax returns will be automatically applied to your balance, though you must still make your regular monthly payments.

If denied

The IRS will explain why your request was rejected (most commonly due to unfiled returns or insufficient payment amount) and provide appeal rights. You typically have 30 days to appeal through the Collection Appeals Program. During the appeal, collection actions remain suspended. Instructions for Form 9465

Ongoing obligations

Throughout your payment plan, you must make every payment on time, file all future returns by their deadlines, and pay all future taxes when due. If you default, the IRS will send a notice of intent to terminate your agreement and may begin levy actions. You can request reinstatement (for a $10 fee online or $89 by phone), but repeated defaults can result in permanent termination.

Setup fees

Setup fees range from $0 (short-term plans) to $22-$178 for long-term agreements depending on payment method and application method. Low-income taxpayers (those with adjusted gross income at or below 250% of federal poverty guidelines) may qualify for fee waivers or reimbursement. IRS.gov Payment Plans

FAQs

Q1: Can I apply for an installment agreement online instead of using Form 9465?

Yes, if you owe $50,000 or less (individuals) or $25,000 or less (businesses) in combined tax, penalties, and interest. The IRS Online Payment Agreement tool is faster and charges lower setup fees than paper Form 9465. You'll receive immediate approval or denial rather than waiting 30 days. Online Payment Agreement Application

Q2: Will interest and penalties stop once I have an installment agreement?

No. Interest and the failure-to-pay penalty continue accruing on your unpaid balance until it's paid in full, even with an approved payment plan. The failure-to-pay penalty rate is reduced from 0.5% to 0.25% per month once your installment agreement is approved, but interest (currently around 8% annually) continues at the standard rate. That's why it's important to pay as much as possible upfront and keep monthly payments as high as you can afford. Instructions for Form 9465

Q3: What happens if I can't make a payment one month?

Missing even one payment can put your agreement in default. Contact the IRS immediately at 800-829-1040 if you'll miss a payment—they may work with you to temporarily adjust the agreement. If your agreement is terminated due to default, the IRS can levy your assets. You can request reinstatement by paying a $10 fee (online) or $89 fee (by phone) and bringing your payments current. IRS.gov Payment Plans

Q4: Can I pay more than my monthly amount or pay off the balance early?

Absolutely, and you should whenever possible. There's no prepayment penalty for installment agreements. You can make extra payments at any time through IRS Direct Pay, by check, or other payment methods. Paying extra or paying off the balance early reduces the total interest and penalties you'll owe.

Q5: Do I qualify for low-income taxpayer status to get the setup fee waived?

You qualify as a low-income taxpayer if your adjusted gross income (from your most recent tax return) is at or below 250% of the federal poverty guidelines. For 2024, that means approximately $36,450 for a single person or $75,050 for a family of four. If you agree to direct debit payments, the setup fee is completely waived. If you can't use direct debit, you pay a reduced $43 fee that will be reimbursed when you complete your payment plan. If the IRS doesn't automatically recognize your low-income status, file Form 13844 within 30 days. Instructions for Form 9465

Q6: Can I change my payment amount or due date after my agreement is approved?

Yes. You can revise your payment amount or monthly due date through the IRS Online Payment Agreement tool for a $10 fee, or by calling 800-829-1040 for an $89 fee. Keep in mind that if you reduce your payment amount, you'll need to justify why your financial situation has changed, and the IRS may require updated financial documentation. IRS.gov Payment Plans

Q7: Will an installment agreement appear on my credit report?

The installment agreement itself doesn't appear on credit reports. However, if the IRS files a Notice of Federal Tax Lien (NFTL) to protect the government's interest in your property, that lien will appear on your credit report and negatively impact your credit score. The IRS generally doesn't file liens for guaranteed or streamlined installment agreements, but may file them for larger debts or partial payment agreements. Instructions for Form 9465

Final Thoughts

Bottom line: Form 9465 provides a legitimate path to pay your tax debt over time when you can't afford to pay immediately. While interest and penalties continue to accrue, an installment agreement protects you from aggressive IRS collection actions and gives you breathing room to resolve your tax debt. The key is proposing a realistic payment plan, staying current on all future tax obligations, and making every payment on time. For the most current information and to apply online, visit IRS.gov/payments.