By approving your application, we agree that you pay the tax you owe in monthly instalments instead of paying the full amount immediately. In return, you agree to make your monthly payments on time. You also agree to comply with all your future tax obligations. This means that you must have enough withholding tax or estimated tax payments for your tax to be paid in full for future years if you file your tax return on time. Your application for a instalment payment agreement will be rejected if no required tax return has been filed. Any refund will be applied to the amount you owe. If your refund is applied to your balance, you will still need to make your regular monthly payment. . As a general rule, if the total amount you owe is more than $25,000 but not more than $50,000, you must either (1) complete lines 13a and 13b and agree to make payments by direct debit, or (2) check boxes 14 to make your payroll payments and attach a completed and signed Form 2159, Payroll deduction contract. A payroll deduction contract is not available if you file Form 9465 electronically. While interest and late penalties on unpaid taxes continue to apply, non-payment of the tax penalty rate is reduced by half while a remittance agreement is in effect.
The usual penalty interest rate of 0.5% per month is reduced to 0.25%. For the calendar quarter beginning July 1, 2020, the interest rate for insufficient payment is 3%. From 1. As of January 2019, the user fee is $10 for instalment payment agreements reinstated or restructured through an online payment agreement (OPA). You must have determined that an OPA will reinstate or restructure the instalment agreement in order to be eligible for the reduced user fees. Low-income taxpayers may be reimbursed for these expenses under certain conditions. See Requirements for modifying or terminating a payment agreement at a later date. If you do not select the check box on line 13c (and do not specify the information on lines 13a and 13b), indicate that you can but cannot make electronic payments by configuring a DDIA. Therefore, your user fee is not refundable after the conclusion of your instalment payment contract. You are entitled to a guaranteed instalment payment agreement if the tax you owe does not exceed $10,000 and: The user fee exemption or refund applies only to individual taxpayers whose gross income is adjusted, as determined for the last year for which this information is available, at or below 250% of the applicable federal poverty line (low-income taxpayers), who enter into long-term payment plans (phased agreements) as of April 10.
2018. If you are a low-income taxpayer, the user fee will be waived if you agree to make payments by direct debit by entering into a Direct Debit Agreement (DDIA). If you are a low-income taxpayer but are unable to make payments by direct debit by entering into a DDIA, the user fee will be refunded to you after entering into the remittance agreement. If the IRS system identifies you as a low-income taxpayer, the online payment settlement tool automatically reflects the applicable fees. If you have additional balances that are not displayed on line 5, enter the amount here (even if they are included in an existing installment contract). Any adjustments or other fees that are not specified in a tax return or notice must be listed in this line. If you enter into a instalment payment agreement that is not paid by direct debit, you may be eligible to pay a reduced fee of $43 or a refund of your expenses if you are a low-income taxpayer, as defined below. See Waiver of User Fees and Refunds next.
The IRS will let you know if you are eligible for the reduced fees. If the IRS does not say you qualify for the reduced fees, you can ask the IRS to consider you for low-income status using Form 13844, Application for Reduced User Fees for Remittance Agreements. In both cases, the IRS reserves the right to file a federal tax lien. .