Quick answer

Yes — in most cases the IRS will consider changes to an approved installment agreement when your financial circumstances change. Modifications are common for job loss, reduced income, large unexpected expenses, or when a taxpayer wants to change how payments are collected (for example, switching to direct debit).

When you should request a modification

  • You lose a job or your income drops substantially.
  • Medical bills, natural disaster losses, or other emergencies make the agreed payment unaffordable.
  • You want to change payment method (manual to direct debit) or extend the term to lower monthly payments.
  • You defaulted or are at risk of default and need to reinstate or renegotiate the plan.

How to request a modification (step-by-step)

  1. Gather documentation: recent pay stubs, bank statements, monthly living expenses, proof of unemployment or medical bills. The IRS will want to see why your ability to pay changed.
  2. Try the Online Payment Agreement (OPA) tool first if you originally set up the plan online — you can sometimes change payment amounts or payment method there: https://www.irs.gov/payments/installment-agreement.
  3. If OPA does not permit the change you need, submit a new Installment Agreement Request (Form 9465) or provide a Collection Information Statement (Form 433‑F or Form 433‑A) when the IRS requests it: https://www.irs.gov/forms-pubs/about-form-9465 and https://www.irs.gov/forms-pubs/about-form-433-f.
  4. If you’re negotiating a partial-payment plan (PPIA) or lower-than-collectible payment, be prepared for the IRS to require a full financial disclosure and to evaluate your ‘‘reasonably collectible’’ amount.
  5. Follow up in writing and keep records of all communications. If you have an assigned IRS revenue officer or contact in the collection division, work through them.

What the IRS typically requires

  • For modest adjustments (change in payment method, extending a term within policy limits) the IRS may allow an online or phone change.
  • To reduce monthly payments below what the IRS calculates as collectible, you’ll usually need to submit Form 433‑F or Form 433‑A so the IRS can recalculate your ability to pay.
  • If you defaulted and ask for reinstatement, expect to show why the default occurred and how you’ll stay current going forward.

Types of modifications you can request

  • Lower monthly payment or longer term.
  • Switch to a Direct Debit Installment Agreement (DDIA) to reduce default risk (see guide: How Direct Debit Installment Agreements Work).
  • Temporarily suspend payments or request currently not collectible (CNC) status if you have no ability to pay.
  • Convert a streamlined agreement to a partial‑payment plan when circumstances justify it.

Limits, timing, and consequences

  • Interest and penalties continue to accrue until the balance is paid in full, even after modification. The modification does not erase that cost.
  • The IRS can deny a requested change if the documentation doesn’t support reduced payments or if you have unfiled returns or unpaid tax liabilities not included in the agreement.
  • Missing required tax filings or future tax payments can trigger default, levy, or termination of the agreement. Keep filing returns and paying current taxes while you negotiate.

Practical tips from practice

  • Contact the IRS as soon as your situation changes. Waiting until you miss a payment makes negotiation harder.
  • Keep clear, current financial records. A concise packet of income/expense documents speeds review.
  • Consider switching to direct debit if you can afford it — DDIA reduces late‑payment risk and is often required for longer terms.
  • If the IRS rejects a modification, ask for written reasoning and discuss alternatives such as currently not collectible status, an offer in compromise, or a partial‑payment installment agreement.

Related FinHelp resources

FAQ (brief)

Q: Will the IRS agree to reduce my monthly payment?
A: Possibly — but the IRS will ask for updated finances if the new payment drops below its calculated collectible amount.

Q: Does modifying the plan stop interest and penalties?
A: No. Interest and most penalties generally continue to accrue until the debt is paid in full.

Q: Can the IRS terminate my agreement during modification?
A: The IRS can terminate or default an agreement for noncompliance (missed payments, new liabilities, or failure to file). That’s why it’s critical to keep current filings and payments.

When to get help

If your tax balance is large, your finances are complex, or the IRS has begun collection actions (levy, lien, or seizure), consult a CPA, enrolled agent, or tax attorney. In my 15+ years advising clients, timely professional help often preserves more options and reduces collection risk.

Authoritative sources

Professional disclaimer

This article is educational and does not constitute legal or tax advice. Individual tax situations vary — consult a qualified tax professional before making decisions affecting your tax obligations.