If you owe the IRS and cannot pay the full balance by the due date, applying for a payment plan is almost always better than ignoring the bill.

The IRS charges interest and a failure-to-pay penalty on unpaid balances, but those charges are smaller when you are in an active installment agreement.

How to Apply Online

For balances under ,000, the Online Payment Agreement tool at IRS.gov lets you set up a plan in minutes without speaking to an agent. You will need to select a monthly payment amount and a payment start date.

Plan Types and Fees

  • Direct debit plans have a lower setup fee
  • Check or online transfer plans cost slightly more to set up

What Happens if You Owe More Than ,000?

A financial disclosure may be required. The IRS will want to review your income, expenses, and assets before agreeing to a payment arrangement.

The Most Important Rule

Keep filing all returns on time even if you cannot pay β€” the failure-to-file penalty is much steeper than failure-to-pay.