Overview

If an IRS installment agreement has closed—because you defaulted, completed it, or it was terminated—you can still ask the IRS to reopen or modify the arrangement when a significant new hardship occurs (job loss, medical bills, disaster loss). The IRS evaluates these requests using current Collection Financial Standards and the taxpayer’s up-to-date income and expense details (IRS — Understanding Installment Agreements, https://www.irs.gov/individuals/understanding-installment-agreements).

Step-by-step process to reopen the agreement

  1. Confirm your account status
  • Check your IRS account online or call the IRS to confirm whether the agreement is closed, in default, or still active. Knowing the exact status changes what the IRS will accept and what documentation is required.
  1. Gather the right documentation
  • Proof of income: recent pay stubs, unemployment statements, or Social Security notices.
  • Bank statements for the last 2–3 months.
  • Recent bills or medical invoices that demonstrate new expenses.
  • A hardship letter explaining why your situation changed and the date the hardship began.
  • Prior installment agreement notices or IRS letters referencing the closed plan.
  1. Decide how to submit your request
  • Online: If eligible, apply for a new or modified Online Payment Agreement via the IRS Online Payment Agreement tool (https://www.irs.gov/payments/online-payment-agreement-application). Streamlined options exist for qualifying balances.
  • Phone/mail: Call the IRS collections phone number on your notice or respond in writing with a documented request to reopen.
  • Financial disclosure: For a Partial-Payment Installment Agreement (PPIA) or unusual hardship claims, prepare Form 433-F, 433-A, or 433-B (Collection Information Statement) and supporting documents. PPIAs generally require full financial disclosure and are evaluated under IRS Collection Financial Standards (https://www.irs.gov/individuals/collection-financial-standards).
  1. Propose a realistic plan
  • Provide a payment amount you can realistically pay. If you cannot pay any monthly amount, explain why and propose alternatives (deferred payments for a short period, short-term pause, or an Offer in Compromise review if applicable).
  1. Follow up and keep records
  • Save copies of everything you send. If you call, note the representative’s name, date, and call ID. Expect follow-up requests for additional documentation.

What the IRS may do next

  • Approve a modified monthly payment, reinstate the original agreement, or deny the request and suggest alternative collection options (e.g., levy, lien, or Offer in Compromise). Interest and penalties usually continue to accrue on unpaid tax until the balance is paid in full or otherwise resolved.
  • Timelines vary: simple modifications might be processed within weeks; PPIA reviews or complex cases can take months. There may be user fees for setting up a new agreement; low-income taxpayers can request a waiver (see IRS Online Payment Agreement information).

When financial disclosure is required

  • Streamlined installment agreements (often available for smaller balances) may be offered without full financial statements. By contrast, if you request a lower payment because you cannot pay the full balance within the statutory collection period, the IRS will typically require a full financial statement (Form 433 series) and detailed supporting documents.

Professional tips from practice

  • In my practice, the clearest hardship letters with dated documentation (termination letter, hospital billing, unemployment award) speed approvals.
  • Don’t guess your budget—prepare a simple monthly cash-flow showing real numbers for income and necessary expenses using IRS Collection Financial Standards as a baseline.
  • If you recently defaulted, try to contact the IRS before notices escalate; proactive outreach often preserves more options.

Common mistakes to avoid

  • Waiting to contact the IRS until after a levy begins. Early contact can prevent enforced collection actions.
  • Submitting incomplete financial forms or generic statements without proof.
  • Assuming no options exist because the earlier agreement closed—each case is fact-specific.

Related resources

Disclaimer

This article is educational and reflects common IRS practices as of 2025. It does not replace personalized tax advice. For case-specific guidance, consult a qualified tax practitioner or an enrolled agent.