How to Get an IRS 120-Day Payment Plan

An IRS short-term payment plan provides an extension to taxpayers who cannot pay their full tax liability by the due date. This arrangement allows for up to 180 additional days to pay the balance in full. It functions as a brief grace period distinct from more formal, long-term installment agreements. A primary feature of this plan is that it does not involve a setup fee. This plan is designed for taxpayers confident they can resolve their debt within the six-month window.

Eligibility for the Plan

To qualify for a short-term payment plan, a taxpayer must meet specific IRS criteria. The total amount owed, including the original tax, accrued penalties, and interest, must be less than $100,000 for individual taxpayers. A taxpayer must also be current with all tax filing obligations, as the IRS will not grant an extension to those who have failed to file all required tax returns.

The plan is available to individuals and businesses that meet the core requirements. The debt threshold and filing compliance remain consistent for all applicants. This plan is for taxpayers with manageable debt who are otherwise in good standing with their filing duties.

Information Required to Apply

Before initiating a request for a payment plan, gather several pieces of information. You will need your name and address exactly as they appear on your most recently filed tax return. A valid email address and your date of birth are also required. Your filing status from your latest return must also be provided.

You must have your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). For joint filers, the SSN or ITIN for the spouse is also necessary. It is also important to know the exact balance you owe the IRS, which can be found on the tax notice sent to you.

How to Request the Payment Plan

There are three primary methods to request a short-term payment plan. The most direct method is through the IRS’s Online Payment Agreement (OPA) tool available on the agency’s website. This system guides you through the application process electronically, and you will receive immediate notification of whether your request is approved. This online portal is designed for taxpayers who meet the specific financial thresholds for short-term plans.

Another way to secure a plan is by calling the IRS directly. You can speak with an IRS representative who can review your account and establish the payment extension over the phone. A third option is to apply by mail using Form 9465, Installment Agreement Request. You would indicate on the form your intention to pay within 180 days.

Managing Your Approved Plan

Once your short-term payment plan is approved, you are responsible for managing it properly to avoid further issues. It is important to understand that interest and late-payment penalties will continue to accumulate on your outstanding balance until it is paid in full. These charges are not frozen by the payment plan, so paying the debt as quickly as possible is advantageous. The approval of the plan simply prevents more severe collection actions, such as levies or liens, as long as you adhere to the terms.

To make your payments, the IRS offers several convenient methods. You can use IRS Direct Pay to make secure payments directly from your bank account without any fees. Alternatively, you can pay with a debit card, credit card, or digital wallet, though these transactions are processed by a third-party payment processor that charges a fee. The most important aspect of managing your plan is ensuring the full tax liability is paid by the 180-day deadline to prevent the agreement from defaulting and triggering renewed collection efforts.