Quick overview

A short-term payment arrangement (STPA) is for taxpayers who can pay their federal tax balance in full within 120 days. It’s a fast way to avoid the formal setup fees charged for longer-term installment agreements, but interest and late-payment penalties keep accruing until the debt is paid in full (IRS — Payment Plans, Installment Agreements).

Step-by-step: Requesting a short-term payment arrangement

  1. Check your IRS account balance. Sign in to your IRS Online Account to confirm the total balance due, including penalties and interest. If you don’t have an account, you can create one at IRS.gov (IRS — Online Account).

  2. Decide whether you can pay in 120 days. Only choose an STPA if you reasonably expect to pay the full amount within 120 days. If you cannot, consider a long-term installment agreement instead.

  3. Apply using one of three methods:

  • Online: Use the IRS Online Payment Agreement (OPA) tool for the fastest response and immediate confirmation. This is the recommended route for most taxpayers. See our walkthrough: Setting Up an IRS Installment Agreement Online: A Practical Walkthrough.
  • Phone: Call the number on your IRS notice or the general IRS phone lines listed on IRS.gov.
  • Mail: Submit Form 9465 (Installment Agreement Request) if you prefer to apply by paper. The form and instructions are on IRS.gov (Form 9465 PDF).

  1. Choose a payment method. Direct debit (automated bank withdrawal) is the most reliable option and reduces the risk of missed payments. You can also pay by debit/credit card or check, but card fees may apply.

  2. Keep documentation and confirm approval. Save any confirmation number, automated acknowledgement, or IRS letter that verifies the arrangement. Monitor your IRS Online Account and your bank to ensure payments clear.

Who’s eligible

  • Taxpayers who can pay the full amount within 120 days. If you need more time, a long-term installment agreement or other relief may fit better.
  • Note: eligibility for streamlined online options and certain automated features can vary by tax type and recent IRS policy updates. Always check IRS.gov for the most current rules (IRS — Payment Plans, Installment Agreements).

Fees, penalties, and interest

  • Short-term arrangements generally do not carry an IRS user setup fee, unlike many long-term installment agreements. However, interest and late-payment penalties continue to accrue until the balance is paid in full (IRS guidance).
  • If you miss payments or default, you risk enforced collection action, including liens or levies, and you may lose streamlined privileges for future agreements.

What to prepare before you apply

  • Current total balance (from your IRS Online Account or notice).
  • Bank routing and account numbers if choosing direct debit.
  • Proof of income or cash-flow details if the IRS requests verification.
  • Contact information and preferred payment date.

Common mistakes and how to avoid them

  • Applying without confirming the full balance. Always verify the amount due in your IRS Online Account.
  • Choosing an STPA when you cannot realistically pay within 120 days. This leads to default and possible collection actions.
  • Missing payments after approval. Use direct debit and set calendar reminders.

If you can’t pay in 120 days

Consider the following alternatives:

  • Long-term installment agreement (monthly payments over more than 120 days).
  • Offer in Compromise if you qualify and can’t fully pay your liability.
  • Temporarily delay collection (currently not collectible) if you have severe financial hardship.

Pro tips from practice

  • Start with the online application: it’s fast, provides immediate confirmation, and reduces errors.
  • Choose direct debit to avoid missed payments and to streamline the process.
  • Maintain current tax filings and pay future taxes timely; failing to remain compliant can void an agreement.

Internal resources

  • For a comparison of options, see our guide: Short-Term Payment Plans vs Long-Term Installment Agreements.
  • For a stepwise online walk-through, see: Setting Up an IRS Installment Agreement Online: A Practical Walkthrough.

Authoritative sources

Disclaimer

This article is educational and does not constitute individualized tax advice. For guidance tailored to your situation, consult a tax professional or CPA.