If you owe money to the IRS, an installment agreement may be a viable option for paying off your debt. This arrangement allows you to make regular monthly payments over time instead of having to pay the entire amount upfront. However, there is a setup fee associated with setting up an installment agreement with the IRS.
The IRS installment agreement setup fee varies depending on several factors. If you apply online, the fee is lower than if you apply by mail. Additionally, the fee can be reduced if you meet certain qualifications.
As of 2021, the IRS installment agreement setup fee is as follows:
– $31 for online applications
– $107 for applying by mail, phone, or in person.
If you meet certain qualifications, you may be eligible for a reduced or waived fee. For example, low-income taxpayers may qualify for a reduced fee, while taxpayers who set up a direct debit agreement may have their fee waived entirely.
It`s important to note that even if you qualify for a reduced or waived fee, you are still responsible for paying your tax debt in full. An installment agreement simply allows you to make payments over time. Additionally, interest and penalties may continue to accrue on your tax debt until it is paid in full.
To set up an installment agreement with the IRS, you will need to fill out Form 9465, which is the Installment Agreement Request form. You can apply online, by mail, or by calling the IRS. If you apply online, you can select the option to reduce your setup fee as appropriate.
In conclusion, the IRS installment agreement setup fee can be a significant expense for those who owe money to the IRS. However, there may be options to reduce or waive the fee depending on your individual circumstances. If you are struggling to pay your tax debt, an installment agreement may be a helpful tool to help you get back on track and avoid further penalties and interest.