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How to set up an IRS installment agreement

TY 2026 IRS Procedure, Penalties & Notices 3 sources ↓ 2026-10-11 Reviewed before publication by Hopkins CPA Firm

Question askedHow do you set up an IRS installment agreement?

Quick answer: For 2026 filings, you set up an IRS installment agreement either online through the Online Payment Agreement (OPA) tool or by mail using Form 9465, and if approved you'll owe a user fee plus ongoing interest and possibly a late-payment penalty on the unpaid balance.

How it works

If you can't pay your full tax bill by the due date, IRS Publication 17 explains that you can ask to make monthly installment payments for the full or a partial amount, though you will be charged interest and may be charged a late payment penalty on the tax not paid by the date your return is due, even if your request to pay in installments is granted, and if your request is granted, you must also pay a fee.

There are two main ways to apply:

  1. Online (OPA): According to IRS Publication 1345, taxpayers who owe $50,000 or less in combined tax, interest, and penalties on a Form 1040 series return may use the Online Payment Agreement (OPA) application to request a payment plan (installment agreement). A benefit of this route is that OPA will result in immediate notification of whether the payment plan is approved. Someone with a valid power of attorney can also apply on your behalf, since authorized representatives with a power of attorney may use OPA on the taxpayer's behalf.

  2. By mail (Form 9465): Alternatively, Publication 1345 notes you can submit Form 9465, Installment Agreement Request, to the IRS by mail, or transmit it electronically with your e-filed return if your software supports it, though it may take 30 days or more for a response, regardless of how it is submitted.

Fees: If approved, the IRS charges a user fee, which may be waived or reimbursed for low-income taxpayers, and taxpayers who apply through OPA are charged a lower user fee, and an even lower user fee if they use the direct debit payment option. The underlying statute, 26 U.S.C. § 6159(f)(2), confirms this low-income accommodation: for a taxpayer whose adjusted gross income does not exceed 250 percent of the applicable poverty level, no fee is imposed if payments are made by electronic debit, and if the taxpayer can't pay electronically, the IRS must reimburse the fee upon completion of the agreement.

Payment methods: Once set up, Publication 17 notes in addition to paying by check or money order, you can use a credit or debit card or direct payment from your bank account to make installment agreement payments.

Before you apply: Publication 17 suggests weighing alternatives first, since to limit the interest and penalty charges, you should pay as much of the tax as possible with your return, and before requesting an installment agreement, consider other less costly alternatives, such as a bank loan or credit card payment.

Risks and limits

Once in place, an agreement isn't guaranteed to stay in effect. Under 26 U.S.C. § 6159(b), the IRS can modify or terminate an agreement if information you provided before the agreement was entered into was inaccurate or incomplete, or the IRS believes collection of the tax is in jeopardy, if your financial condition has significantly changed, or if you fail to pay an installment when due, fail to pay another tax liability when due, or fail to provide a requested financial update. You do have a right to appeal: the statute requires the IRS to establish procedures for an independent administrative review of terminations of installment agreements for taxpayers who request such a review. For agreements involving partial payment of the liability, the law also requires the Secretary to review the agreement at least once every 2 years.

Because approval, fees, and modification depend heavily on your specific balance, income, and payment history, it's worth talking to a CPA to structure the right agreement for your situation.

Sources relied upon

  1. IRS publication IRS Publication 17 — Your Federal Income Tax (Individuals) — Introduction › How Do I Prepare My Return?, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “Installment Agreement If you can’t pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the date your return is due, even if your request to pay in installments is granted. If your request is granted, you must also pay a fee.”
  2. IRS publication IRS Publication 1345 — Handbook for Authorized IRS e-file Providers — Payment Options for Taxpayers › Installment Agreement, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “Taxpayers who can’t pay the amount they owe for Form 1040 series returns and owe $50,000 or less in combined taxes, interest and penalties may use the Online Payment Agreement (OPA)Online Payment Agreement (OPA) application to request a payment plan (installment agreement).”
  3. IRS publication IRS Publication 1345 — Handbook for Authorized IRS e-file Providers — Payment Options for Taxpayers › Installment Agreement, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “OPA will result in immediate notification of whether the payment plan is approved.”
  4. IRS publication IRS Publication 1345 — Handbook for Authorized IRS e-file Providers — Payment Options for Taxpayers › Installment Agreement, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “Authorized representatives with a power of attorney may use OPA on the taxpayer’s behalf.”
  5. IRS publication IRS Publication 1345 — Handbook for Authorized IRS e-file Providers — Payment Options for Taxpayers › Installment Agreement, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “Alternatively, they can submit Form 9465Form 9465, Installment Agreement Request, to the IRS by mail. The Provider can transmit Form 9465 electronically (if supported by software) with the taxpayer’s electronic return data, or the form may be submitted later by mail. It may take 30 days or more for a response to Form 9465, regardless of how it is submitted.”
  6. IRS publication IRS Publication 1345 — Handbook for Authorized IRS e-file Providers — Payment Options for Taxpayers › Installment Agreement, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “If the installment agreement is accepted, the IRS charges a user fee, which may be waived or reimbursed for low-income taxpayers. Taxpayers who apply through OPA are charged a lower user fee, and an even lower user fee if they use the direct debit payment option.”
  7. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (f) Installment agreement fees › (2) Waiver or reimbursement · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(2) Waiver or reimbursement In the case of any taxpayer with an adjusted gross income, as determined for the most recent year for which such information is available, which does not exceed 250 percent of the applicable poverty level (as determined by the Secretary)— (A) if the taxpayer has agreed to make payments under the installment agreement by electronic payment through a debit instrument, no …”
  8. IRS publication IRS Publication 17 — Your Federal Income Tax (Individuals) — Introduction › How Do I Prepare My Return?, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “In addition to paying by check or money order, you can use a credit or debit card or direct payment from your bank account to make installment agreement payments.”
  9. IRS publication IRS Publication 17 — Your Federal Income Tax (Individuals) — Introduction › How Do I Prepare My Return?, p. 18 · see it highlighted in context · official source (p. 18) ↗
    “To limit the interest and penalty charges, pay as much of the tax as possible with your return. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan or credit card payment.”
  10. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (b) Extent to which agreements remain in effect › (2) Inadequate information or jeopardy · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(2) Inadequate information or jeopardy The Secretary may terminate any agreement entered into by the Secretary under subsection (a) if— (A) information which the taxpayer provided to the Secretary prior to the date such agreement was entered into was inaccurate or incomplete, or (B) the Secretary believes that collection of any tax to which an agreement under this section relates is in jeopardy.”
  11. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (b) Extent to which agreements remain in effect › (2) Inadequate information or jeopardy · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(b) Extent to which agreements remain in effect › (3) Subsequent change in financial conditions If the Secretary makes a determination that the financial condition of a taxpayer with whom the Secretary has entered into an agreement under subsection (a) has significantly changed, the Secretary may alter, modify, or terminate such agreement.”
  12. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (b) Extent to which agreements remain in effect › (2) Inadequate information or jeopardy · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(b) Extent to which agreements remain in effect › (4) Failure to pay an installment or any other tax liability when due or to provide requested financial information The Secretary may alter, modify, or terminate an agreement entered into by the Secretary under subsection (a) in the case of the failure of the taxpayer— (A) to pay any installment at the time such installment payment is due under suc…”
  13. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (d) Secretary required to review installment agreements for partial collection every two years · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(f) Installment agreement fees The Secretary shall establish procedures for an independent administrative review of terminations of installment agreements under this section for taxpayers who request such a review.”
  14. Statute 26 U.S.C. § 6159 — Agreements for payment of tax liability in installments — (d) Secretary required to review installment agreements for partial collection every two years · see it highlighted in context · official source ↗ · same text at Cornell LII ↗
    “(d) Secretary required to review installment agreements for partial collection every two years In the case of an agreement entered into by the Secretary under subsection (a) for partial collection of a tax liability, the Secretary shall review the agreement at least once every 2 years.”

Quoted passages are extracted verbatim from the source documents by the citation system — they cannot be fabricated by the AI.

General information for tax year 2026 — not tax advice for your situation, and no client relationship is created. Full disclaimer.
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