Quick overview
If you owe federal income tax but haven’t filed one or more tax returns, you can often negotiate a payment plan with the IRS before you submit every missing return. Entering a plan can reduce immediate collection pressure and let you make monthly payments while you gather documents and file the missing returns. However, a payment plan does not replace the legal requirement to file—unfiled returns still need to be submitted. (See IRS Payments and Online Payment Agreement pages for details: https://www.irs.gov/payments and https://www.irs.gov/individuals/payments/online-payment-agreement-application.)
Who can use a payment plan before filing?
- Individuals who owe federal income tax but have not yet filed the related returns.
- Taxpayers facing temporary cash-flow problems, job loss, medical hardship, or other life events that delayed filing.
- Small-business owners or sole proprietors who need time to assemble business records.
In my practice, clients who are months behind on returns often benefit from a short-term or long-term installment agreement so they can stop collection calls and get breathing room to prepare accurate returns.
How the IRS generally handles non-filers who request payment plans
- Estimate your total liability—see next section.
- Contact the IRS or use the Online Payment Agreement (OPA) tool to request a plan.
- Provide documentation if requested (bank statements, pay stubs, or a completed Collection Information Statement such as Form 433-F).
- Enter a short-term (up to 120 days) or long-term installment agreement.
The IRS can accept a plan based on a reasonable estimate of taxes owed, but it retains the right to request supporting information and to reopen terms if the estimate proves materially wrong.
How to estimate what you owe (practical steps)
- Pull prior-year returns or wage statements (W-2s, 1099s). If you don’t have them, order transcripts from the IRS: Get Transcript (https://www.irs.gov/individuals/get-transcript).
- Use simple math: apply estimated taxable income to the appropriate tax rate, add self-employment tax if applicable, and add penalties and interest approximation. If you’re unsure, use a tax preparer or tax software to create draft returns for the missing years.
- When you need a conservative approach, overestimate slightly to avoid underpaying; underestimating can lead to default or collection adjustments later.
Important: estimating well reduces the risk the IRS will later demand additional payments or change the plan.
Ways to request a payment plan (and what to expect)
- Online: The IRS Online Payment Agreement (OPA) tool is the fastest way to request short- or long-term plans (https://www.irs.gov/individuals/payments/online-payment-agreement-application). The OPA accepts many cases, but you may need to provide more documentation if you haven’t filed returns.
- By phone: Call the IRS collections number listed on any notice you received. If you haven’t received a notice, call the general helpline (find local numbers at https://www.irs.gov/help/telephone-assistance).
- By mail: Submit Form 9465 (Installment Agreement Request) or other requested forms. See Form 9465 page (https://www.irs.gov/forms-pubs/about-form-9465).
- With a representative: If you hire a CPA, enrolled agent, or attorney, they can call or submit forms on your behalf using a signed Power of Attorney (Form 2848).
If the IRS asks for financial details, you may be asked to complete Form 433-F (Collection Information Statement) or provide bank statements and pay stubs. See Form 433-F (https://www.irs.gov/forms-pubs/about-form-433-f).
Internal resources: For step-by-step help on setup and online requests, see FinHelp’s pieces “Setting Up an IRS Installment Agreement” and “How to Request an Installment Agreement Online” which outline application steps and documentation you’ll need.
- Setting Up an IRS Installment Agreement: https://finhelp.io/glossary/setting-up-an-irs-installment-agreement/
- How to Request an Installment Agreement Online: https://finhelp.io/glossary/how-to-request-an-installment-agreement-online/
- If you think you may qualify for scaled payments, see “How to Qualify for a Partial Payment Installment Agreement”: https://finhelp.io/glossary/how-to-qualify-for-a-partial-payment-installment-agreement/
Types of plans the IRS offers (how they apply to non-filers)
- Short-term Payment Plan: Generally up to 120 days. Good if you expect to file and pay soon. No long-term set-up usually required.
- Long-term Installment Agreement: Monthly payments over more than 120 days. These require more documentation and may include set-up fees or automatic debit requirements depending on your method.
- Partial Payment Installment Agreement (PPIA): The IRS may agree to lower monthly payments that don’t fully pay the debt before the Collection Statute Expiration Date; PPIAs require detailed financial disclosure. (See FinHelp guide above.)
Note: entering any of these plans does not nullify unfiled-return penalties. You should file missing returns as soon as possible to minimize additional penalties and interest.
Consequences you should understand
- Filing requirement remains: a payment plan does not satisfy the legal duty to file returns; penalties for failing to file and failing to pay continue to accrue until returns are filed and balances paid.
- Enforcement actions: if you ignore notices or default on an agreement, the IRS can place liens, levy bank accounts, garnish wages, or offset future refunds.
- Accuracy checks: the IRS may later audit or adjust your estimated liability when you file; this can change monthly payment amounts.
Practical tips and professional strategies
- Start the conversation early. In many cases, calling and requesting a plan before the IRS escalates will reduce stress and collection risk.
- Use direct debit when practical. Direct debit installment agreements reduce the chance of accidental missed payments and are easier to maintain.
- Keep records. Save payment confirmations, IRS correspondence, and drafts of any returns you prepare.
- File missing returns promptly. Even if a plan is in place, prepare and file each missing return; filing limits future penalties and prevents criminal exposure in extreme cases.
- Consider professional help. If your situation includes multiple years, business returns, or potential criminal exposure, work with an enrolled agent, CPA, or tax attorney.
In my experience, a clear estimate and a willingness to provide bank statements or a completed Form 433-F dramatically increases the chance a collections specialist will approve a workable plan.
Common mistakes and how to avoid them
- Underestimating tax owed: Be conservative in your estimate or get help preparing draft returns.
- Ignoring notices: Every IRS notice includes deadlines; ignoring them can accelerate enforcement.
- Delaying filing: A payment plan gives time, not a reprieve from filing. Prioritize filing to stop continuing penalties.
- Forgetting to update the IRS if your finances change: If your income improves, you may need to increase payments or repay faster.
Frequently asked questions
Q: Can the IRS refuse a plan because I haven’t filed?
A: The IRS can request filings or additional documentation, but it frequently approves plans on an estimated liability if you provide reasonable information and payment capacity. Approval depends on facts and circumstances.
Q: Will a payment plan protect me from liens or levies?
A: Entering a plan can often forestall new enforcement actions, but existing levies or liens may remain until resolved. A payment plan reduces the immediate incentive for further action but is not a guarantee against all collection.
Q: Are application fees refundable or waivable?
A: There is frequently a set-up fee for long-term agreements and reduced or waived fees for low-income taxpayers. Check IRS guidance or ask a representative about fee relief.
Next steps checklist
- Gather last two years of W-2s/1099s, bank statements, and pay stubs.
- Order IRS transcripts if you lack documents (https://www.irs.gov/individuals/get-transcript).
- Estimate liability or prepare draft returns.
- Use the Online Payment Agreement tool or call the IRS to request a plan (https://www.irs.gov/payments).
- If asked, complete Form 433-F and submit requested financial documentation.
- File missing returns as soon as feasible.
Real-world example (anonymized)
A client owed roughly $7,000 over two unfiled years. We ordered transcripts, estimated taxes using prior W-2s and a draft 1040, and applied through OPA for a 36-month plan with direct debit. The client made consistent payments and filed the missing returns within 12 months; penalties stopped growing after filing, and the case never reached enforcement. That outcome is typical when taxpayers act quickly and communicate clearly.
Professional disclaimer
This article is for educational purposes only and does not constitute tax, legal, or financial advice. Individual circumstances differ—consult a tax professional or attorney for guidance tailored to your situation.
Authoritative sources
- IRS — Payments: https://www.irs.gov/payments
- IRS — Online Payment Agreement (OPA) application: https://www.irs.gov/individuals/payments/online-payment-agreement-application
- IRS — Form 9465, Installment Agreement Request: https://www.irs.gov/forms-pubs/about-form-9465
- IRS — Form 433-F, Collection Information Statement: https://www.irs.gov/forms-pubs/about-form-433-f
Related FinHelp guides
- Setting Up an IRS Installment Agreement: https://finhelp.io/glossary/setting-up-an-irs-installment-agreement/
- How to Request an Installment Agreement Online: https://finhelp.io/glossary/how-to-request-an-installment-agreement-online/
- How to Qualify for a Partial Payment Installment Agreement: https://finhelp.io/glossary/how-to-qualify-for-a-partial-payment-installment-agreement/
By estimating responsibly, starting the conversation with the IRS, and filing missing returns as you go, most non-filers can get current on payments and avoid more severe collection steps.
