IRS Form 9465: Installment Agreement Request

Each year, there are thousands of Americans who find out they owe much more in taxes than they are financially prepared for and cannot feasibly pay off all at once. Fortunately, the IRS has systems in place to help reduce the burden of these financial setbacks. Enter: Form 9465, Installment Agreement Request. Keep reading to learn how to use IRS Form 9456 to your advantage, or use the sections below to get the answers to your questions right away. 

• What is IRS Form 9465?
• What is Form 9465 Used For?
• Who Should File Form 9465?
• How do I File Form 9465?
• What Happens if I Don’t Pay My Tax Debt? 
• How Can Community Tax Help Me with Form 9465?

What is IRS Form 9465?

Form 9465 is a document you can file to formally request a monthly installment payment plan in the event you cannot pay what you owe from your federal tax return. In most cases, it is a good idea to pay a portion of your tax debt before asking for payment assistance from the IRS for the leftover balance. With Form 9465, you can avoid paying an immediate lump sum right away and pay your tax debt back in monthly installments, ranging within 60 months, instead.

What is Form 9465 Used For?

Form 9465 grants taxpayers the ability to pay their tax debt in monthly installments if they do not do not have the funds readily available. This is especially beneficial for those wishing not to be in hot water with the IRS and need a more manageable way to settle their debt.

Who Should File Form 9465?

Individuals with an outstanding tax debt balance that cannot be paid off in full right away should consider filing Form 9465. Besides this, you can also use Form 9465 if

• You manage a Trust Fund Recovery Penalty  
• You owe employment taxes pertaining to a business that is no longer operating 

If this is the case, call the number on the most recent notice you received from the IRS to ask for an installment agreement.

When Should I Not Use Form 9465?

The use of Form 9465 should be reserved for the special circumstances mentioned above and should not be submitted for the following reasons: 

• If you can pay the total amount you owe in taxes in 120 days or less
• If you want to use an online payment agreement (simply apply online)
• Your business is still in operation, and you need to pay employment or unemployment taxes. 

How Do I File Form 9465?

To file IRS Form 9465, you’ll need to follow a specific process depending on how much you owe:

• If you owe more than $50,000, you will need to send in your 9465 by mail. When you file your taxes, simply attach this form to the front of your tax return. The form can also be submitted by itself, so you can conveniently file your taxes online and send this form separately. In addition to filing Form 9465, you’ll also need to submit Form 433-F. This document provides the IRS with financial information that tax officials will use to determine your ability to pay your debt. You may also need to provide proof of income and living expenses.
• If you owe less than $10,000 in taxes, your installment agreement request will be automatically approved by the IRS as long as you’ve properly and timely filed all of your income tax returns. Another stipulation is that you must not have used an installment payment plan within the last five years.

Form 9465 Instructions

To begin, you will first have to get the Form from the IRS website. As mentioned earlier, if you owe more than $50,000, the IRS payment plan form must be submitted by mail. You will have to either download it and fill it out or complete it manually, print it, and send it to the appropriate address. We’ll go over Part I and II of the form so that you know what to expect once you’re ready to file. Let’s get started. 

Part I: In the first section of the form, you will provide the IRS with the form(s) your tax debt corresponds to, as well as identifying information, such as your name, Social Security number, address, and phone number. The IRS will ask you to provide the best time to call you, so make sure it’s a timeframe where you generally are available, like your day off.

If you are requesting a payment plan from the IRS for a joint tax return, you’ll also need to include the name and SSN of your spouse. Moreover, if you’re seeking an installment agreement for a business that is no longer in operation, you will need to provide the name of the business and Employer Identification Number (EIN). 

After completing the lines that require you to calculate your financial information, you will write the day you want to make your monthly payments and include your banking information if you’re going to make direct payments. If you rather have these payments deducted from your payroll, you’ll have to file Form 2159. 

Part II: This section asks you to supply the IRS with additional information only if

• Your previous IRS payment plan went into default in the past 12 months 
• Your tax debt is more than $25,000 but less than $50,000
• The amount from line 11a (or line 11b) is less than what is on line 10 

If you meet the conditions above, you’ll provide information regarding your dependents, household expenses, take home pay, and more. 

Although the instructions on Form 9465 seem pretty straightforward, it is always best to seek professional tax help, especially when it comes to paying off tax debt that could have negative implications if left unsettled. 

How to File Form 9465 Electronically

If you owe $50,000 or less in taxes, penalties, and interest, you might be able to submit an online installment agreement application through the IRS website. You can also call 1-800-829-1040.

Where to Mail Form 9465

The specific IRS location you will need to send your installment agreement request to depends on the state you live in. To find the correct address, check out the IRS “Where To File” section.

What Are the Payment Installment Methods? 

There are various ways a taxpayer can repay their tax debt using a monthly installment plan from the IRS. Below are the options you can choose from, including the costs associated with each method:

• Check, money order, or credit card: $149 for online payment, $225 for mail
• Direct debit: $31 for online payment, $107 for mail
• Payroll deduction installment agreement: $120

Fees can be waived or reduced if you’re classified as a low-income taxpayer. Use Form 13844, Application For Reduced User Fee for Installment Agreements, to determine your eligibility for a fee reduction on your payment plan. If accepted, your user fee can be reduced to $43, which can also be waived or reimbursed if you qualify. 

With that said, you can update your installment agreement online if the current payment schedule or amount no longer works for you. However, the IRS charges a $89 fee to change the installment agreement. Make sure to only make adjustments that are absolutely necessary in order to avoid paying that fee multiple times. 

The IRS also charges interest on the unpaid balance of your debt, and you may be subject to late fees on past-due payments. We’ll take a closer look at the interest rates the IRS charges for installment agreements in the next section. 

Interest Fees Associated With An Installment Payment Agreement

The IRS will charge a daily compounding interest rate that’s equivalent to the short-term federal funds rate plus 3%. This rate is calculated each quarter. Tax officials may also charge a failure-to-pay penalty which ranges. Keep in mind that the total penalties and the IRS payment plan interest rate can add up to 9% to 12% on an annual basis. So, taxpayers must be prepared to pay not only their principal balance but the fees associated with their payment plan as well.

If possible, it is in your best interest to try to make more than the minimum required monthly payments to reduce the financial burden of these peripheral charges. It is also prudent to pay off as much tax debt as you can from the beginning so that the initial principal loan debt balance on your installment plan is smaller. By doing so, you will end up paying less in fees and interest for the duration of your installment agreement.

What Happens if I Don’t Pay My Tax Debt? 

If you fail to pay your tax debt, the government has the legal right to seize assets, garnish your wages, and take other necessary steps to settle your debt. The government can also file a tax lien or place an official IRS levy on your assets. You may be able to avoid these serious consequences by filing an installment agreement request with Form 9465.

Note: You must make all payments on time by the date specified on your agreement. Payments can be submitted between the 1st and 28th of a month. If you are late on any of your payments, your account is immediately in default and may result in more severe consequences. 

How Can Community Tax Help Me with Form 9465?

The professionals at Community Tax can help you fill out Form 9465 correctly and give you the best chance at approval. Plus, our tax experts will work diligently to create a plan to ensure your tax-debt is resolved once and for all. With numerous years of experience under our belts, we’ve successfully assisted clients with their installment agreements. Our specialists are also well-versed in other crucial matters concerning the IRS and can solve many of your tax-related needs. Call (833) 573-0251 or email us at info@communitytax.com to enlist the help of a Community Tax professional today.