How to Reapply for an Installment Agreement After Default

Quick answer

If you defaulted on an IRS installment agreement, you can often reapply or request reinstatement — but you must first address the reasons for default (missed payments, unfiled returns or other compliance issues). Start by bringing tax returns current, gathering updated income and expense documentation, and either use the IRS Online Payment Agreement tool or contact the IRS collection office that handles your case. (See IRS guidance on installment agreements: https://www.irs.gov/payments/installment-agreements)

Why default happens and what it triggers

Default commonly occurs when a taxpayer misses scheduled payments, fails to file required tax returns while under an agreement, or otherwise violates terms (for example, not staying current on withholding or estimated taxes). Consequences include:

• Termination of the agreement and loss of the benefits it provided.
• Continued accrual of penalties and interest on the unpaid balance.
• Increased collection activity (tax liens, wage levies, bank levies) if the IRS pursues enforced collection.

The IRS may contact you with a Notice of Intent to Terminate the installment agreement before final termination. If a lien or levy is already in place, reapplying can still be possible, but the IRS will evaluate all circumstances and may require additional security or alternative resolution options. For an overview of how installment agreements work, consult the IRS resource: https://www.irs.gov/payments/understanding-installment-agreements

Step-by-step: How to reapply or reinstate after default

Below is a practical workflow I use with clients to restore compliance after a default:

1. Stop and verify your status

• Review any IRS notices and the date and reason for default. Notices often explain what is required to prevent termination or to reinstate an account.
• Check account transcripts (View on IRS Online Account) to confirm amounts due, penalties, and interest.

1. Bring filings current

• File any unfiled federal tax returns immediately. The IRS generally won’t approve a new installment agreement if required returns are missing.
• If you can’t file all returns right away, explain timing to the IRS and request short extensions to submit paperwork.

1. Calculate what you can realistically pay

• Prepare a simple budget showing monthly income and essential expenses. The IRS may request a Collection Information Statement (Form 433-F for individuals and businesses) to evaluate your ability to pay. See form details: https://www.irs.gov/forms-pubs/about-form-433-f

1. Contact the IRS or reapply online

• Online: If eligible, use the IRS Online Payment Agreement (OPA) system to request a new or reinstated agreement. The OPA is often the fastest route for straightforward cases (https://www.irs.gov/payments/online-payment-agreement-application).
• By phone or mail: If your case is complex, contact the IRS collection office shown on your notice or call the number on correspondence. You may be asked to submit financial documentation.
• Paper: You can still submit Form 9465 (Installment Agreement Request) in some situations, but many taxpayers use the online tool for speed.

1. Consider the type of plan to request

• Short-term plans (pay-in-full within 120 days) may have no setup fee.
• Long-term plans typically require monthly direct debit and sometimes a setup fee (the IRS offers reduced fees for low-income taxpayers).
• If you can’t pay the full suggested monthly payment, propose a reduced payment and be prepared to support it with financial records.

1. Ask for reinstatement if applicable

• If you recently defaulted and have the missed payment(s) available, ask the IRS to reinstate the previous agreement by paying the missed amounts and any required fees.
• If reinstatement isn’t possible, request a new installment agreement and explain circumstances leading to default.

1. Document everything

• Keep copies of filed returns, bank statements, pay stubs, and any correspondence with the IRS. If your payments were interrupted by a verifiable hardship (job loss, medical emergency), document that; it can support a reasonable-payment request.

Typical documentation to prepare

Below is a compact checklist of common documents the IRS may request during reapplication:

• Copies of required federal tax returns (current and prior years).
• Recent pay stubs, Social Security or other benefit statements.
• Bank statements for the last 2–3 months.
• Monthly bills and documented recurring expenses (rent/mortgage, utilities, insurance, and child support).
• A recent budget or income/expense worksheet.
• Prior installment agreement information, notices, and a history of payments made under the old plan.
• Completed Collection Information Statement (Form 433-F) or equivalent if requested.

If the IRS denies or won’t reinstate

If the IRS declines your reinstatement request, you still have options:

• Request a Collection Due Process (CDP) or equivalent appeal if the IRS filed a lien or proposed levy. You can use Form 12153 to request a hearing when applicable (see the IRS CDP rules).
• Consider alternative resolutions: Offer in Compromise (if you can’t pay full tax liability), Currently Not Collectible status (temporarily pause enforced collection), or asking for a partial-pay installment agreement.
• Work with a tax professional or Low Income Taxpayer Clinic (LITC) for representation or to help file appeals.

Reapply vs. other collection options

Reapplying for an installment agreement is often the quickest route to stop collection activity and set predictable monthly payments. However, the IRS will evaluate your overall ability to pay. If monthly payments under a reasonable plan would not clear the debt within a meaningful period, alternatives such as an Offer in Compromise or Currently Not Collectible status may be more appropriate (see options: https://www.irs.gov/payments/installment-agreements).

For related guidance on qualifying and applying originally, see our walkthroughs: “Qualifying for an IRS Installment Agreement: Eligibility, Costs, and Application Tips” and “How to Apply for an IRS Installment Agreement: Types and Eligibility”. These pages explain eligibility criteria and application mechanics in depth:

• Qualifying for an IRS Installment Agreement: https://finhelp.io/glossary/qualifying-for-an-irs-installment-agreement-eligibility-costs-and-application-tips/
• How to Apply for an IRS Installment Agreement: https://finhelp.io/glossary/how-to-apply-for-an-irs-installment-agreement-types-and-eligibility/

Also see our article on lowering monthly payments if you need modification: “IRS Installment Agreements: How to Get a Reduced Monthly Payment” (https://finhelp.io/glossary/irs-installment-agreements-how-to-get-a-reduced-monthly-payment/).

Timeline and fees

Processing time varies. Using the IRS online tools generally produces faster responses; complex cases requiring a Collection Information Statement or appeals can take weeks to months. A setup fee may apply for some types of installment agreements, but reduced or waived fees are available to eligible low-income taxpayers. Check current fee guidance on the IRS site: https://www.irs.gov/payments/installment-agreements

Practical tips to avoid re-default

• Use direct debit: Choosing an automatic direct debit lowers the chance of missed payments and is typically required for longer-term plans.
• Keep returns current: File timely returns and pay estimated taxes if required — staying current prevents automatic defaults.
• Revisit your budget regularly: If income changes, contact the IRS before missing payments to renegotiate terms.
• Communicate promptly: Don’t wait for the IRS to contact you; proactive communication and documentation of hardship can improve outcomes.

Real-world example (illustrative)

A self-employed client fell behind after a medical emergency; their previous installment agreement defaulted when they missed three payments. We filed their missing tax return, prepared a current income/expense statement using Form 433-F, and requested a new installment agreement through the IRS Online Payment Agreement system. By proposing a realistic monthly payment and choosing direct debit, the client’s new plan was approved within several weeks and enforced collection actions stopped. This is a common path back to compliance for taxpayers who show current financial ability to meet a new plan.

When to seek professional help

If your case involves liens, levies, complex business taxes, or multiple years of unfiled returns, work with a tax attorney, enrolled agent, or CPA experienced in IRS collections. In my practice, representation shortens negotiation time and reduces errors on financial statements submitted to the IRS. Low Income Taxpayer Clinics (LITCs) also offer free or low-cost help for qualifying taxpayers.

Final checklist before applying or calling the IRS

• File all required tax returns.
• Prepare a 60–90 day bank statement history and last 2–3 pay stubs.
• Draft a realistic monthly budget and determine a target payment.
• Decide whether to use online application, phone, or a tax professional.
• Document recent hardships (job loss, medical bills) if relevant.

Disclaimer

This article is educational and does not offer personalized tax advice. Rules and procedures change; consult the IRS website (https://www.irs.gov) or a qualified tax professional for guidance tailored to your situation.