Life's financial challenges can sometimes get the better of us. If you find yourself in the position of being unable to pay your entire tax liability by the tax return due date, you can contact the IRS to see if you qualify to make installment payments on the balance. If the IRS approves your request, it will send you Form 433-D (Installment Agreement) to complete and send back if you'll be making monthly payments by an automatic debit from your bank account. Although you may still owe penalty and interest fees on your late payments, you'll come out better in the long run by setting up an installment agreement instead of ignoring your tax liability.
Understanding IRS Installment Agreements
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The IRS offers five types of installment agreements to help taxpayers pay the back taxes they owe. These agreements are tailored to the amount of money a taxpayer owes including three options for making payments: You can mail your payment, pay online or pay by automatic debit from your bank account. If you set up your installment payments as a monthly debit, you'll use Form 433-D to give the IRS your bank account information.
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Requesting an Installment Agreement
You can request a payment plan through an installment agreement by visiting the IRS online at IRS.gov/Form 9465 and following the instructions to download and submit IRS Form 9465 (Installment Request). You can also call the IRS at 1-800-829-1040 to request a mailed copy of this form if you don't have internet access.
Filling Out 433-D
Form 433-D includes Part 1 (the IRS copy) and Part 2 (your copy). The last page, after Part 2, includes the instructions for filling out the form. Complete Form 433-D by filling in the blanks provided for each required field.
After you complete the form, you'll sign and date it before returning Part 1 to the IRS. If you filed a joint tax return, your spouse will also have to sign and date the form.
If you have any questions about how to fill out the form, contact the IRS at 1-800-829-0922 (individuals, wage earners), 1-800-829-8374 (individuals, self-employed/business owners) or 1-800-829-0115 (business).
Entering Your Payment Amounts
Designate on the form the amount of a partial payment that you can make now, and then note how much you can pay each month with recurring payments through your automatic bank debit. (In some cases, the IRS has predetermined this amount for you.) You'll also choose the date each month on which you want your payment electronically debited from your bank account.
Entering Your Bank Account Information
The first two digits of your bank routing number begin with either 01 through 12 or 21 through 32. The IRS recommends not using one of your blank deposit slips to verify your bank's routing number because it may contain extraneous internal bank numbers that aren't a part of your actual routing number.
Your account number may include up to 17 characters. Enter any hyphens that might be included in your account number, but omit any spaces or special symbols. There may be some unused spaces after you've entered your number – this is okay; simply leave the spaces blank.
Sending 433-D to the IRS
The 433-D address you'll use to send this form to the IRS will vary, depending on your location. Mail the form to the address that's listed on the payment plan letter you received from the IRS, approving your request for an installment agreement. You can also mail the form to the address that's listed in the "For assistance" box on the front of your form.