In the IRS Tax Tip 2025-29, the IRS reminds taxpayers that there are options available to those who can’t pay in full.

  1. Pay now (or by the tax deadline)
  2. Short term payment plan – 180 days or less – Individuals: Benefits $0 set if applied online, phone, in person or mail
  3. Long term payment plan – Depends on the following:
    1. Individuals – Usually up to 72 months (6 years) and the tax liability under $50,000 (this is the threshold where the passport could be removed).
      1. Another option that needs to be approved for over 72 months is the Partial Payment Installment Agreement (PPIA) based on the ability to pay and the remaining debt may be forgiven after the Collection Statute Expiration Date (CSED – balance might be removed after 10 years)
    2. Business – Usually up to 24 months (2 years) and the tax liability under $25,000

You can see the option in the following link –  https://www.irs.gov/payments/payment-plans-installment-agreements

There are numerous important considerations when requesting these payment plans:

  • Approval: The taxpayer has to ensure that the requirements are met or the payment plan will be rejected (potentially having to apply again or submit updated documents)
  • Interest and Penalties: These continue to accrue on unpaid tax balances until the debt is fully paid. Remember it continues growing
  • Setup Fees: Fees vary depending on the payment method and the taxpayer’s income level as mentioned in the points above.
  • Maintaining the Agreement: It’s crucial to make all payments on time and stay current with future tax obligations to avoid defaulting on the agreement. If there are other taxes due, the current agreement with be void as it does not comprise all liabilities.

If you need any assistance with previous tax balances, we can help setting up installment agreements, offer in compromise and other tax agreements with the IRS and tax authorities. Our team of tax professionals is dedicated to supporting you every step of the way.