IRS Form 13844 is also called the Application For Reduced User Fee For Installment Agreements. This form requests a reduced user fee for taxpayers who have not already been classified as low-income and are applying for an IRS payment plan.
Make sure to fill out Form 13844 within 10 days of receiving your acceptance letter to enter an installment agreement with the IRS.
IRS Payment Plans
Facing tax debt with the IRS can be scary and some taxpayers may feel like they’re swimming in tax debt. It is always best for taxpayers to pay their debts in full right away to avoid penalties from the IRS. However, with sometimes overwhelming tax debt balances, not all taxpayers are able to fully complete their payments within their filing date deadline. For taxpayers who are unable to repay their tax debts within the tax season deadline, the IRS offers some payment plan options – also called installment agreements, to help taxpayers avoid further debts and collections measures.
Being approved for an IRS payment plan means you have an agreement with the IRS to pay off your debts within an extended timeframe. By confirming this option, you not only have some additional time to ensure you make your full tax repayments, but you can also avoid facing penalties from the IRS.
The IRS cites the following as benefits to payment plans:
- Avoid accruing additional interest and fees
- Avoid a future tax refund offset
- Avoid issues with your credit report that may jeopardize your eligibility for new loans or lines of credit
How To Get an IRS Installment Agreement
To be approved for an IRS installment agreement, you’ll need to first evaluate the installment agreement options to find which works best for you. Consider the amount you owe on your taxes, and see which payment plans you may be eligible for.
There are four common types of payment plans offered by the IRS:
- Guaranteed Installment Agreement
- Non-Disclosure Installment Agreement
- Streamlined Installment Agreement
- Partial Payment Installment Agreement
Feeling overwhelmed by the IRS payment plan options? Using a tax relief help service like Community Tax can help you evaluate your tax debts, and our tax specialists can recommend a payment plan with installments that fit within your budget. Our tax professionals are experienced with installment agreements and know how to get installment agreements approved with the IRS quickly.
Once you have decided which payment plan suits you, you will need to apply for an installment agreement with the IRS.
Are There Fees for Entering an Installment Agreement with the IRS?
The IRS does incur a user fee upon entering an installment agreement. These fees are used to cover the cost to process installment agreements.
What Are the Fees for Entering an Installment Agreement with the IRS?
The fees for entering an installment agreement are generally:
- $105 for non-direct debit installment agreement
- $52 for direct debit installment agreement (DDIA)
A direct debit installment agreement means the taxpayer will see automatic payment withdrawals from their bank account. A non-direct debit installment agreement means the taxpayer will use a debit or credit card to complete their installment agreement payments.
Qualifying for Reduced User Fees for Installment Agreements
The IRS offers a reduced $43 fee for taxpayers with a qualifying income within government poverty guidelines. In certain cases, the IRS may even waive the fee altogether if the taxpayer meets specific requirements.
Taxpayers that have been classified as low-income will automatically see the appropriate reduced charge reflected as their user fee upon entering an installment agreement. Low-income taxpayers who are able to commit to a direct debit installment agreement (DDIA) will have their user fee waived by the IRS. Low-income taxpayers who are unable to enter a DDIA and will pay their installments with non-direct, may have their user fee reimbursed once they have completed all payments.
If you are in the process of applying for an installment plan with the IRS but have not been considered low-income, you may want to consider filling out IRS Form 13844. A taxpayer must meet the IRS’ income requirements to qualify for a reduced fee for an IRS installment agreement. If approved, the taxpayer may still be able to get a reduced rate for installment agreements.
How To Fill Out Form 13844
Step One: Download Form 13844
Download the Official IRS Form 13844 from the IRS website, and access your paperwork from the current tax year to help you complete Form 13844. Form 1040, as well as your spouse’s Social Security Number (SSN) or Taxpayer Identification Number (TIN) will help you fill out Form 13844.
Step Two: Fill Out Form 13844
First refer to the Low-Income Taxpayer Adjusted Gross Income Guidance chart on Form 13844 to see if your income is lower than the specified low-income category for your state and family unit size. If your income is lower than that specified, you qualify for a reduced rate. If your income is higher than this number, you do not qualify and should not proceed with Form 13844.
Once you’ve confirmed you’re eligible to apply based on your income, fill out your tax information accordingly. Both you and your spouse will need to sign and date the bottom of the form.
Step Three: Where to Mail Form 13844
Mail your completed form to the IRS at:
Internal Revenue Service
P.O. Box 219236, Stop 5050
Kansas City, MO 64121-9236.
Step Four: Get Confirmation from the IRS
Wait for a response from the IRS about the status of your application fee.
Step Five: Make Your Installments and Get Back On Track with the IRS
The best way to maintain good standing with the IRS is to pay off your tax debt fully and on time. Failing to pay your taxes on time could result in serious collection measures, like tax liens that can damage your credit score. Making your installment payments each month is crucial to getting back on track with the IRS.
Using a professional tax help service like Community Tax can help ease the process of setting up installment agreements and getting approved for a reduced user fee for your installment agreement with the IRS.