How do I request an installment agreement online?
An IRS Installment Agreement lets you spread an unpaid federal tax balance into monthly payments, reducing immediate financial strain. If you meet the IRS online eligibility rules, you can apply using the Online Payment Agreement (OPA) tool instead of mailing forms. This guide walks through the online steps, eligibility checks, documentation, common issues, and alternatives — based on long experience helping individuals set up payment plans and current IRS guidance (see IRS Installment Agreements).
Definition
An Installment Agreement is an arrangement with the IRS to pay a federal tax debt in regular installments. Online applications are available for taxpayers who meet certain limits and who have filed required returns.
What you must confirm before you start
- You have filed all required federal tax returns. The IRS generally won’t approve an installment agreement if returns are unfiled. (IRS, “Installment Agreements”).
- Your combined unpaid tax, penalties and interest generally must be $50,000 or less to apply using the streamlined online tool. If you owe more, you still have options but usually must contact the IRS directly or submit additional financial information.
- You’ll need reliable identification to access IRS online services — the IRS may require identity verification (for example, using the Online Account sign-in process).
- Decide on a viable monthly payment before applying; the IRS wants to see a reasonable, sustainable plan.
Step-by-step: How to request an installment agreement online (practical guide)
- Gather required information
- Social Security number or Individual Taxpayer Identification Number (ITIN), date of birth and filing status.
- Address, phone number and email.
- The tax year(s) and the exact amount owed (including penalties and interest) — check IRS notices and your Online Account for balances.
- Bank account and routing numbers if you plan to set up direct debit (recommended). If you prefer another payment method, have those details ready.
- A proposed monthly payment amount based on your budget.
- Confirm filing and eligibility
Make sure all past-due returns are filed. If you haven’t filed, do that first — filing is usually required for approval. For complex situations (bankruptcy, offer in compromise pending, or serious collection activity), speak with a tax professional before applying.
- Sign into the IRS Online Payment Agreement tool
- Go to the IRS Installment Agreements page and follow the link to the Online Payment Agreement tool. You may be prompted to sign in to your IRS Online Account and complete identity verification.
- The OPA tool will walk you through selecting plan type, entering amounts and choosing payment method.
- Choose the payment option that fits your situation
- Direct Debit Installment Agreement (DDIA) is the most reliable and often simplest option; payments are automatically withdrawn from your bank account. DDIA reduces default risk and may be required for certain balances. For details on direct debit terms, see our Direct Debit Installment Agreement (DDIA) guide.
- Manual payments (pay-by-check or EFTPS) are allowed but increase the risk of missed payments.
- Payroll deduction agreements are another option for some taxpayers, handled through your employer.
- Propose a monthly payment and review the terms
- Use a budget-based approach: list monthly income and essential expenses, then propose a payment that is sustainable. The IRS will evaluate whether the amount is reasonable.
- Expect interest and failure-to-pay penalty to continue accruing until the balance is paid.
- Carefully review any setup fees and terms. Fee amounts and collection methods can change, so check the IRS page for current information.
- Complete the application and submit
- Double-check taxpayer details and amounts before finalizing. Small mistakes (wrong SSN, typo in balance) can delay approval.
- If you set up direct debit, you’ll need to authorize the bank withdrawal.
- Submit the application. The OPA tool often provides immediate confirmation when the plan is accepted; in other cases, the IRS may mail a confirmation.
- Keep records and stay compliant
- Save the confirmation or approval letter and your payment schedule.
- Make every monthly payment on time. Falling behind can result in default, additional penalties, or enforcement actions (liens, levies).
- Continue to file returns and pay any current year taxes on time while the agreement remains in effect.
What if the IRS doesn’t approve the online application?
- If your balance exceeds the online threshold or the system can’t approve your plan, you will usually get instructions to contact the IRS by phone.
- For complex financial situations, the IRS may request a Collection Information Statement (Form 433-F or Form 433-A/B) to evaluate your ability to pay.
- If you disagree with an IRS decision, you can request a review or seek help from a qualified tax pro.
Options if you owe more than the online limit
- Call the IRS to request a long-term installment agreement and be prepared to provide financial data.
- Consider alternatives such as an Offer in Compromise if you cannot realistically pay the full amount (see our comparison: Installment Agreements vs. Offers in Compromise).
- If you are in bankruptcy or negotiating with creditors, consult an attorney or CPA — different rules may apply.
Common mistakes and how to avoid them
- Applying before filing all returns: file past-due returns first.
- Proposing an unrealistic payment: do a simple budget and choose an amount you can pay for the duration of the plan.
- Ignoring identity requirements: verify your IRS Online Account access ahead of time to avoid delays.
- Selecting manual payments when you have unreliable cash flow: direct debit reduces missed-payment risk.
Real-world examples (anecdotal)
- In my practice, a taxpayer with a $25,000 balance who used the OPA tool and chose direct debit received immediate online approval and avoided the stress of collection notices. Another client owing above the online limit needed to supply detailed financials — we filed Form 433-F and negotiated a longer-term plan.
Fees, penalties and interest (what to expect)
- Interest and the failure-to-pay penalty generally continue to accrue until the balance is paid in full. The installment agreement does not stop interest from running.
- The IRS charges user fees for setting up an installment agreement in many cases; fee amounts and reduced fees for low-income taxpayers are subject to change. Always confirm current fees on the IRS website before applying.
Modifying or ending an installment agreement
- If your financial situation changes, you can request a modification online or by contacting the IRS. For modifications that change payment dates or amounts, the IRS may require additional documentation.
- To pay off the balance early, you can make lump-sum payments at any time.
When to get professional help
- If you owe a very large amount, face an imminent levy or lien, are self-employed with variable income, or have a complicated financial picture, consult a CPA or tax attorney. Professional help can speed negotiations and reduce risk of enforcement action.
Links and further reading
- IRS: Installment Agreements (official guidance) — https://www.irs.gov/payments/installment-agreements
- Related FinHelp.io guides:
- Setting Up an IRS Installment Agreement (detailed walkthrough) — https://finhelp.io/glossary/setting-up-an-irs-installment-agreement/
- Direct Debit Installment Agreement (DDIA) — https://finhelp.io/glossary/direct-debit-installment-agreement-ddia/
- Installment Agreements vs. Offers in Compromise (compare your options) — https://finhelp.io/glossary/installment-agreements-vs-offers-in-compromise-which-is-right-for-you/
Frequently asked questions
Q: Can I apply online if I’m self-employed?
A: Yes — self-employed taxpayers can use the online tool if they meet eligibility and filing requirements. Be sure to propose a payment that accommodates variable income.
Q: How long does approval take?
A: If you meet the online eligibility criteria and provide accurate information, approval can be immediate. Otherwise, the IRS may take several weeks and send a mailed notice.
Q: What happens if I miss a payment?
A: Missing payments can lead to default of the agreement. The IRS may assess additional penalties and pursue collection actions. Contact the IRS right away if you anticipate a missed payment to request modification.
Professional disclaimer
This article is educational and not personalized tax or legal advice. For advice tailored to your situation, consult a licensed CPA, tax attorney, or enrolled agent.
Closing tips
- Prepare documentation and verify your Online Account access before you apply.
- Choose direct debit if possible to lower default risk.
- Keep filing current and communicate with the IRS if your situation changes.
If you’d like, I can walk through a sample application with numbers and wording tailored to a hypothetical budget to show how to pick a realistic monthly payment.