How to Set Up an IRS Payment Plan
A payment plan is the most common resolution. If you owe less than $50,000, the IRS must accept one.
If you owe $50,000 or less (including penalties and interest), you can set up a streamlined installment agreement with no financial disclosure required. Pick a monthly amount that pays the balance within 72 months, and the IRS accepts it. You can even set this up online at IRS.gov.
If you owe more than $50,000, or need lower payments, you'll need to provide financial information. The IRS calculates what you can afford based on income minus allowable expenses.
Is a Payment Plan Always Best?
Not always. If you qualify for an Offer in Compromise, you might pay far less. If the collection statute expires in a few years, CNC status might let the debt expire entirely. A payment plan is the default, but it's not always the cheapest option.