If you owe taxes to the Internal Revenue Service (IRS), you may be wondering how long it takes to set up an installment agreement. An installment agreement is a way to pay off your tax debt in monthly payments over time. Here’s what you need to know about the process and how long it typically takes to set up an installment agreement with the IRS.
First, you’ll need to determine your eligibility for an installment agreement. You can request an installment agreement online or by mail using Form 9465, Installment Agreement Request. To be eligible, you must owe $50,000 or less in combined tax, penalties, and interest and be able to pay off the debt within six years (72 months). If you owe more than $50,000, you may still be eligible for an installment agreement, but you’ll need to provide additional financial information and may need to negotiate directly with the IRS.
Once you’ve submitted your request for an installment agreement, the IRS will review your application and may ask for additional information or clarification. This can add some time to the process, so be prepared to provide any documentation or details the IRS requests. In some cases, the IRS may need to verify your income or expenses before approving your request. This can also take some extra time.
Assuming your application is complete and meets all the necessary requirements, you can typically expect to hear back from the IRS within 30 days. This is the standard processing time for installment agreement requests, although it can sometimes take longer during peak tax season or if the IRS is experiencing a high volume of requests.
If your request is approved, you’ll receive details about the monthly payment amount, due date, and any fees or interest associated with the installment agreement. You’ll need to make sure you make your payments on time and in full to avoid any penalties or additional fees. You may also have the option to pay off your balance early or make larger payments to pay off your debt faster.
Overall, the process of setting up an installment agreement with the IRS can take anywhere from a few weeks to a few months, depending on your specific circumstances and any additional information the IRS may need. The sooner you submit your request, the sooner you can start paying off your tax debt and avoiding any further penalties or interest.