What Is the IRS Form 433-D Installment Agreement?

An IRS Form 433-D, “Installment Agreement,” is a binding contract that formalizes a payment plan with the Internal Revenue Service. While an initial request for an installment plan is often made online or with Form 9465, Form 433-D is used to finalize the terms. It is most commonly used to authorize the IRS to automatically withdraw a fixed monthly amount from a taxpayer’s bank account, an arrangement known as a Direct Debit Installment Agreement (DDIA).

The primary purpose of Form 433-D is to finalize the payment terms once the IRS has approved an installment plan. In many cases, the IRS will send a partially completed Form 433-D to the taxpayer to sign and return. By setting up automated payments, the form helps ensure consistent progress toward resolving the tax debt and can prevent more severe collection actions, such as wage garnishments or bank levies.

Information Needed to Complete Form 433-D

To complete Form 433-D, you will need your full name as it appears on your tax returns, your current mailing address, and your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). If you file taxes jointly with a spouse, their information will also be required.

You must also identify the specifics of your tax debt. This includes the tax years or periods for which you owe, along with the corresponding tax form numbers, such as Form 1040 for individual income tax. The form requires you to state the total amount of tax you owe and agree to a specific monthly payment amount.

The information for setting up automatic payments is your bank account details. You will need to provide the name of your bank or financial institution, the bank’s routing number, and your checking or savings account number. This information allows the U.S. Treasury to execute the automatic monthly withdrawals as stipulated in the agreement.

Submitting the Completed Form

Once you have filled out and signed Form 433-D, you can mail it to the IRS service center listed in its instructions. Many taxpayers can complete the entire process online, as setting up an installment agreement through the IRS website is often faster and may result in lower user fees. The online application allows you to establish payment terms and authorize direct debit without mailing physical forms.

Whether you apply online or by mail, the IRS will send a formal notice of acceptance once the terms are approved. This confirmation will establish the agreement and provide details, such as the date the first automatic payment will be debited from your bank account. This is typically 30 to 60 days after the agreement is finalized.

It is important to keep a copy of the completed Form 433-D for your records. This document, along with the IRS acceptance letter, serves as proof of your payment arrangement. You should not assume the agreement is active until you receive official confirmation from the IRS.

Managing Your Installment Agreement

Once your Direct Debit Installment Agreement is active, you have ongoing responsibilities to keep it in good standing. The requirement is ensuring sufficient funds are in your designated bank account each month to cover the automatic withdrawal. A failed payment can lead to default, which gives the IRS the right to terminate the agreement and resume more aggressive collection activities.

Beyond making the scheduled payments, you must also remain compliant with all future tax obligations. This means you are required to file all subsequent federal tax returns on time and pay any new tax liabilities in full by their due dates. The IRS may apply any future tax refunds you are owed to your outstanding balance until the debt is fully paid. Failure to meet these ongoing compliance requirements is a common reason for an installment agreement to be terminated.

If your financial circumstances change, making it difficult to afford the agreed-upon monthly payment, you should not simply stop the payments. Instead, contact the IRS directly to discuss modifying the terms of your agreement. It may be possible to adjust the payment amount or change the withdrawal date. Proactively communicating with the IRS is a better approach than defaulting on the agreement.