If you have a tax debt, there are a number of IRS fees for setting up a payment plan or installment agreement. These IRS fees can add up quickly if you default and need to reapply.
The IRS fee for setting up a payment plan on direct debit from your bank account is $52. This is the least expensive because you are authorizing the government to debt your bank account and the risk of default is lower.
The next IRS fee is $120 for an installment agreement if you will send in a check each month or have the money taken out of your paycheck (payroll deduction). With a payroll deduction, your employer must send the government a check on your behalf. As you can imagine, these are not very popular with taxpayers because of the embarrassment involved.
I will note that the IRS sometimes requires a payroll deduction rather than allowing you to send a check. If you have defaulted more than once, or without good cause, the government will want some assurances that it won’t happen again … which they believe they get with a payroll deduction.
If you have very limited resources, you might qualify for a $43 installment agreement, rather than $52 or $120. There are a number of low income categories, so, suffice it to say, you will need to be about at the poverty line to qualify for a low income installment agreement. To be honest, very view people who must make payments, and are not listed as uncollectible, qualify for the discounted rate. If your income is low enough for the discount, you probably don’t need to pay anything.
These IRS fees apply equally to payment plans setup online, through a professional, or by mail. If you owe less than $50,000, you can set up a streamlined payment plan online. If you owe $25,000 in payroll taxes, you may set up an online payment plan and these IRS fees apply.
I hope this post on IRS fees has been helpful. Please take a read through my more detailed articles on resolving your IRS tax debt.