Background

When the IRS sends a final notice of intent to levy, it signals that enforcement actions (garnishments, bank levies, or property seizure) may follow unless the debt is resolved. An installment agreement is one of the most common ways taxpayers stop or avoid those actions by committing to regular payments. In my 15 years helping clients, quick, well-documented proposals—especially requests for direct-debit plans—have the best chance of success.

Step-by-step: How to negotiate after a final notice

  1. Don’t ignore the notice. Respond immediately to the contact instructions on the notice and ask for time to propose a plan.
  2. Confirm the amount. Use IRS online accounts or contact the IRS to verify the balance, penalties, and interest so your proposal covers the correct total (IRS, Installment Agreements).
  3. Gather documentation. Typical items: recent pay stubs, bank statements, monthly bills, and a completed financial statement if requested (Form 433‑F or 433‑A). If you plan a streamlined online request, you may not need full forms for smaller balances.
  4. Choose the right request method:
  • Online: Use the IRS Online Payment Agreement tool for many individual cases.
  • Phone: Call the number on your notice and ask about installment options.
  • Mail: Submit Form 9465 (Installment Agreement Request) or the financial statement the IRS requests.
    (IRS, How to Settle Your Tax Debt)
  1. Propose realistic monthly payments. The IRS is more likely to accept direct-debit arrangements and proposals that fit documented cash flow. If you owe under the streamlined threshold, the process is faster.
  2. Ask for a stay of levy. If a final notice is active, tell the IRS you are requesting an installment agreement and ask whether the agency will suspend levy while it reviews your request. Keep proof of your request.
  3. Follow up. If you don’t hear back in a reasonable time, call again and retain records of all interactions.

Types of installment agreements to consider

  • Streamlined installment agreement: Simpler approval process for many taxpayers who owe below the IRS threshold and can pay within the allowed term.
  • Partial-payment installment agreement: Allows lower monthly payments based on a financial statement; the IRS periodically reviews the account.
  • Direct-debit plan: Often required or favored for approval; it reduces defaults.

Practical thresholds and timelines

  • Streamlined agreements often apply when total tax, penalties, and interest fall below the IRS’s online threshold (commonly used figures around $50,000 for streamlined programs). Approved plans can extend up to 72 months in many cases, but exact limits and rules change — always confirm current thresholds on IRS.gov.

When negotiation may not be enough

If you cannot afford any reasonable installment payment, other options include:

  • Offer in Compromise (if you meet the strict eligibility tests) — see IRS guidance.
  • Request help from the Taxpayer Advocate Service if the IRS process is causing a hardship.

Common mistakes to avoid

  • Waiting: A final notice is time-sensitive; delays can lead to levies.
  • Under-documenting: Not providing sufficient proof of income/expenses reduces credibility.
  • Proposing unrealistic payments: The IRS may deny an agreement if it appears unsustainable.

Links and further reading

Authoritative notes and sources

This entry uses current IRS guidance about installment agreements and debt settlement options. See the IRS pages linked above for the latest thresholds, forms, and online tools.

Professional disclaimer

This article is educational and does not constitute legal, tax, or financial advice. For advice tailored to your situation, consult a tax professional or contact the Taxpayer Advocate Service if you face imminent collection action.