You can contact the IRS directly to work out a payment arrangement without hiring a tax professional

The IRS has several formal programs that let you pay what you owe in installments or settle for less than the full amount. You do not need a tax attorney or enrolled agent to set one up — the IRS processes these requests from individuals every day. The process is slower than hiring someone, and you will need to gather documents and make phone calls yourself, but the cost is zero and you keep full control of the negotiation.

Which program works for you depends on how much you owe, whether you can pay anything right now, and whether the IRS has already filed a lien or wage garnishment against you. The three main paths are a short-term payment plan (if you can pay within 120 days), a long-term installment agreement (monthly payments over years), or an Offer in Compromise (settling for less than you owe). Each has different income limits, paperwork, and approval timelines.

Key Takeaways

  • The IRS accepts payment plans and settlement offers directly from taxpayers without requiring you to hire a representative.
  • A short-term payment plan covers debts you can pay off within 120 days and requires only a phone call to set up.
  • A long-term installment agreement lets you pay monthly over several years and requires Form 9465 plus proof of income and expenses.
  • An Offer in Compromise lets you settle for less than you owe, but the IRS accepts very few and requires detailed financial documentation.
  • You must file all current tax returns and be current on estimated tax payments before the IRS will consider any settlement or plan.

Short-term payment plans: paying off debt within 120 days

If you can pay your full tax debt within 120 days, you can set up a short-term payment plan by calling the IRS at 1-800-829-1040. No forms are required. You tell the IRS when you can pay, they confirm the amount you owe, and you make a lump-sum payment or a few installments by the deadline you agree to. There is no setup fee for a short-term plan.

This is the fastest and cheapest option if you have the cash available. The IRS does not check your income or expenses — they only care that you can pay within the timeframe. If you miss a payment, the plan ends and collection action resumes, so only commit to a timeline you can actually meet.

Long-term installment agreements: monthly payments over years

If you cannot pay within 120 days, you can request a long-term installment agreement to pay in monthly installments. The IRS charges a setup fee (currently $31 to $225 depending on how you pay and your income level) and a monthly interest and penalty charge on the unpaid balance. You can request this by phone, by mail, or through the IRS Online Payment Agreement tool at IRS.gov.

To set up an agreement by phone, call 1-800-829-1040 and have ready: your Social Security number, the tax year(s) you owe for, the total amount owed, and a monthly payment amount you can afford. The IRS will calculate how many months it will take to pay off at that rate. If the monthly payment is very small (under $25), the IRS may refuse the plan and require a lump-sum payment instead.

If you want to set up the plan yourself without a phone call, use the IRS Online Payment Agreement tool. You will need to enter your income and expenses so the IRS can verify you cannot pay faster. This tool works only if you owe $50,000 or less in combined tax, penalties, and interest. If you owe more, you must file Form 9465 (Installment Agreement Request) by mail or call the IRS.

Once approved, your monthly payment is due on the same date each month. The IRS will send you a notice confirming the payment date and amount. If you miss a payment, you have 30 days to make it up before the agreement is cancelled and collection action resumes. If your financial situation improves, you can pay faster without penalty.

Offers in Compromise: settling for less than you owe

An Offer in Compromise (OIC) lets you settle your tax debt for less than the full amount if you can show you cannot pay the full debt even over time. The IRS accepts very few offers — roughly 1 in 4 — and the process takes 6 to 24 months. You must be current on all tax filings and estimated payments before you submit an offer, and you must continue filing and paying on time while the offer is being reviewed.

To submit an offer, you file Form 656 (Offer in Compromise) along with Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) or Form 433-B (for businesses). These forms require you to list all income, expenses, assets, and liabilities. The IRS uses this information to calculate your "reasonable collection potential" — the amount they believe you could realistically pay over time. Your offer must be at least that amount, or the IRS will reject it.

You can submit an offer by mail to the IRS Submission Processing Center for your state (the address is on Form 656), or through the IRS Online Offer system if you owe $50,000 or less. There is a $225 filing fee, though you may request a fee waiver if your income is below 250% of the federal poverty line. The IRS will send you a notice confirming receipt and assigning a case number.

While your offer is pending, the IRS will not pursue collection action (wage garnishment, bank levy, or liens), but interest and penalties continue to accrue on the unpaid balance. If the IRS rejects your offer, you can appeal within 30 days or submit a new offer with different terms. If the IRS accepts, you will receive a letter stating the settlement amount and payment terms.

What documents you need to gather before you contact the IRS

For any payment plan or settlement, have these items ready before you call or submit forms: your Social Security number, the tax year(s) you owe for, the total amount owed (the IRS can tell you this, but it speeds up the call), and your current contact information (phone and mailing address).

For a long-term installment agreement or an Offer in Compromise, you will also need to provide income and expense information. Gather recent pay stubs (last 30 days), proof of self-employment income if applicable (tax returns or profit-and-loss statements), a list of monthly expenses (rent, utilities, food, insurance, childcare, transportation), and a list of assets (bank accounts, vehicles, property). If you are married and filing jointly, you will need the same information for your spouse.

For an Offer in Compromise specifically, also gather documentation of any financial hardship: medical bills, job loss letters, disability notices, or other evidence that your circumstances prevent you from paying. The IRS does not require this, but it strengthens your case.

How to contact the IRS and what to expect during the call

Call the IRS at 1-800-829-1040 Monday through Friday, 7 a.m. to 7 p.m. your local time. Wait times are longest in the morning and during tax season (January through April). Have your Social Security number and any tax documents in front of you before you call.

Tell the representative you want to set up a payment plan or discuss settlement options. They will verify your identity, confirm the tax year(s) and amount owed, and ask about your financial situation. If you are requesting a short-term plan, the call usually takes 10 to 15 minutes. For a long-term plan or offer, the call may take 30 to 45 minutes because the representative will ask detailed questions about income and expenses.

The representative will not make a final decision during the call for a long-term plan or offer — they will take your information and send you a formal notice by mail within 2 to 4 weeks. If you are approved for a short-term plan, you will receive confirmation immediately and can make your first payment within days.

If you cannot reach the IRS by phone or prefer written communication, you can mail Form 9465 (for installment agreements) or Form 656 (for offers) to the IRS Submission Processing Center for your state. The address is printed on the form. Processing by mail takes 4 to 8 weeks longer than phone requests.

What happens if the IRS rejects your request or you cannot keep up with payments

If the IRS denies your payment plan request, they will send you a letter explaining why. Common reasons include: you did not file all required tax returns, you did not pay current estimated taxes, or you did not provide accurate financial information. You can appeal the denial within 30 days by sending a written response to the address on the letter, or you can submit a new request with corrected information.

If you are approved for a plan but later cannot make a payment, contact the IRS immediately at 1-800-829-1040. Do not skip the payment and hope the IRS does not notice — the agreement will be cancelled and collection action will resume. If your financial situation has permanently changed, you can request a modification to lower your monthly payment or extend the timeline. The IRS will review your current income and expenses and may approve a new arrangement.

If a wage garnishment or bank levy is already in place when you set up a payment plan, the IRS will usually release the levy once the plan is approved and you make your first payment on time. Request this in writing or ask the representative during your call to confirm the levy will be released.

Frequently Asked Questions

Do I have to file all my back tax returns before I can set up a payment plan?

Yes. The IRS will not approve any payment plan or settlement offer until you have filed all required returns for the past six years. If you have not filed, contact a tax professional or the IRS to file those returns first. This is a non-negotiable requirement.

Can I set up a payment plan if the IRS has already filed a lien against my property?

Yes. Setting up a payment plan does not remove an existing lien, but once you make consistent payments, you can request that the IRS release the lien. Ask the IRS representative or include a request for lien release in your written correspondence. The IRS typically releases liens after you have made 12 to 24 months of on-time payments.

What if I cannot afford any monthly payment amount?

If your income barely covers basic living expenses, you may be a candidate for Currently Not Collectible status. This temporarily pauses collection action while you remain in financial hardship. Interest and penalties still accrue, but the IRS will not pursue wage garnishment or levies. Call 1-800-829-1040 and ask about this option. It is not permanent — the IRS will review your status every two years.

How long does it take to get approved for an Offer in Compromise?

The IRS typically takes 6 to 24 months to review and decide on an offer. During this time, collection action is paused, but interest and penalties continue to accrue. You will receive status updates by mail. If the IRS needs more information, they will send you a letter requesting it, and you will have 30 days to respond.

Can I change my monthly payment amount after the plan is approved?

Yes. If your income increases, you can pay faster without penalty. If your income decreases, you can request a modification to lower your monthly payment. Call 1-800-829-1040 or send a written request to the address on your payment agreement notice. The IRS will review your current financial situation and may approve a new payment amount.