Paying your taxes in full and on time avoids unnecessary penalties and interest. However, if you cannot pay your taxes in full, you may request a payment agreement.
Individuals who owe $25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) application to request a payment agreement. This application will allow you (or your authorized representative if you have given power of attorney) to qualify, apply for an installment agreement, and receive immediate notification of approval. There are fees to pay by installment agreement.
The online payment agreement process is fairly easy, but you also have the option to apply for an agreement by telephone.
The IRS will usually accept a payment arrangement that provides for paying your tax bill within five (5) years, so that is a good amount to suggest as a payment. (Divide your tax bill by 60 to arrive at a monthly payment amount.)
Notes: you must file all tax returns and pay all taxes when due if you are in a payment agreement.
