Do you owe money to the IRS? If the amount on your tax return exceeds what you can comfortably pay in one lump sum, you may be able to make the payments in monthly installments, instead.
You can use the 9465 Form from the IRS to request this arrangement. Today, we’re covering what this form means, how to fill it out, and where to send it.
What Is the 9465 Form?
Each year, Americans find that they owe more taxes than they can pay back immediately. At the same time, there are others who owe a significant amount in back taxes and cannot pay off their total tax debt in full.
The IRS has a program in place that allows those taxpayers to pay the government back over time, rather than all at once. To request and implement this setup, you’ll need to fill out Form 9465: Installment Agreement Request.
While this can relieve you of the short-term stress that you might feel over your taxes, keep in mind that there’s a cost. You will continue to accrue penalties and interest on the overdue amount that you owe until you pay everything off in full. While your exact timeline will depend on the total amount you owe, most repayments must be completed within 72 months.
Where Can I Find It?
You can find Form 9465 on the IRS website. If you file your taxes with qualified tax attorneys, they can help you locate and complete this form when you file your taxes.
Who Can Fill It Out?
If you’re a taxpayer who cannot meet your total tax obligation, you may be eligible to complete Form 9465. In fact, if you owe less than $10,000, the IRS may even approve your request automatically. However, you will need to meet certain conditions, first.
The first condition is that you must have filed all of your past tax returns. This must also be the first installment payment agreement you’ve initiated in the past five years.
To qualify for immediate approval, you must also be unable to pay your taxes in full when they are due. In other words, you cannot use this program to simply move out your payment timeline for convenience. There must be a real financial need behind the request.
Finally, the last condition is that you must be able to pay back the full amount that you owe within three years. If you meet all of these qualifiers, then the IRS should automatically approve your IRS Form 9465 request. You can complete and submit the form electronically.
Owing More Than $50,000
What if you owe a substantial amount more? If your tax debt exceeds $50,000, you cannot complete Form 9465 online. However, that doesn’t mean you cannot submit it. You’ll need to complete the paper copy, and add original signatures to it.
Once complete, you’ll add Form 9465 to the top of your tax return when you file it. Or, you can submit it separately at any time.
Who Should Not Fill It Out?
There are certain taxpayers to should not complete IRS Form 9465. This includes individuals who:
- Are still making payments under a previously-enacted installment agreement
- Have filed for bankruptcy
If you’re paying off an existing installment arrangement, you may be able to contact the IRS and request that additional amounts be added to your plan. If you’ve filed for bankruptcy, contact the IRS to see if you can make an offer-in-compromise to help offset your tax burden.
Form 9465 vs. IRS Online Payment Agreement
At the top of Form 9465, the IRS notes that taxpayers who owe less than $10,000 in taxes may be able to avoid filling out Form 9465. Instead, they can enter into an Online Payment Agreement or OPA.
There are three categories of OPAs, including:
- Full payment
- Long-term payment plan
- Short-term payment plan
To qualify for a long-term payment plan, you must owe no more than $50,000 in combined tax, penalties, and interest. You must also file all required tax returns. Under this plan, you will make monthly payments until the tax debt is paid in full.
The short-term payment plan increases that limit to $100,000, with total payment due in 180 days. One advantage of going this route is that your user fee will be lower with an OPA than with Form 9465. Your tax attorneys can advise you on which option is best suited for your situation.
Which One Is Right For You?
Not sure which agreement to pursue? Here are a few quick breakdowns.
Use Form 9465 if you’re a taxpayer who:
- Owes income tax on Form 1040 or 1040-SR
- Is responsible for a Trust Fund Recovery Penalty
- Owes employment taxes on a sole proprietor business no longer in operation
- Owes an individual shared responsibility payment under the Affordable Care Act
Use an OPA plan if you’re a taxpayer who:
- Can pay the full amount you owe in 120 days (short-term plan)
- Owes less than $50,000 (long-term plan)
Fees to Establish an Installment Payment Plan
There’s a price to pay for the flexibility of an instalment payment plan. Taxpayers will pay a one-time setup fee. The exact amount will depend on how they choose to pay. The different options include:
- $31: Set up an online payment agreement and make payments via direct debit
- $107: Make payments via direct debit, but do not set up an online payment agreement
- $149: Set up an online payment agreement, but do not make payments via direct debit
- $225: Don’t set up an online payment agreement and don’t make payments via direct debit
Note that the IRS may waive the $31 setup fee for low-income taxpayers who opt to pay via direct debit. The $149 fee is also reduced to $43 for those individuals. In some cases, the IRS may choose to waive the setup fee altogether.
If you request a reduced fee when completing the form, the IRS has the power to deny that request if you do not meet the established qualifications. If that happens, you can repeal it by filing IRS Form 13844: Application for Reduced User Fee for Installment Agreements.
Paying via Payroll Deduction
Do you prefer to make your monthly tax payments with money taken from your paycheck? You can do that, but there are a few extra steps to follow. First, you’ll need to pay the setup fee for this arrangement, which is $225.
You will also need to complete IRS Form 2159: Payroll Deduction Agreement.
In addition to the initial setup fee, taxpayers may also be required to pay other fees during the course of their installment payment agreement. For instance, there is an $89 fee to modify the agreement or terminate it altogether. This fee is lowered to $43 for qualifying low-income taxpayers.
Where to File Form 9465
Wondering where to file federal form 9465?
If you’re filing online, you’ll simply complete the form as part of your online tax return. If you’re completing the paper version, you will attach the form to the front of your return. Then, you can send it to the address shown on the tax return booklet.
How to Complete IRS 9465 Form
Now that we’ve covered the basics, let’s go over how to fill out Form 9465.
Lines 1a and 1b
In the fields of Line 1a, you’ll enter your basic contact information. Are you making this request as part of a joint tax return? If so, enter the names and social security numbers (SSNs) in the same order as you did on your tax return.
If the address you entered in Line 1a is different than what you entered on your last tax return, check the box on Line 1b.
On Line 2, you will enter the name of your business, as well as your Employer Identification Number. To qualify, this business must no longer be in operation.
Lines 3 and 4
Lines 3 and 4 are where you’ll enter your home and work telephone numbers. You’ll also indicate the best time for the IRS to call.
On Line 5, enter the total amount you owe as shown on your tax return or notice. This can include amounts from more than one tax year.
If you have any additional outstanding balances that aren’t included in the amount on Line 5, you can enter the amount on Line 6. This applies even if those amounts are included in an existing installment agreement. This includes any adjustments or charges that aren’t reported on a tax return or notice.
On Line 7, you will add the totals from Lines 5 and 6. Note that if the sum is less than $50,000, you can request an installment agreement online rather than filling out Form 9465.
You can make your first payment on the plan when you file the form. Doing so can help you limit the penalty and interest charges you’ll accrue. Enter the amount you’re paying now on Line 8.
If you’re filing Form 9465 with your tax return, you can make the payment with your return. If you’re completing it separately, then you can attach a check or money order, made payable to United States Treasury. If you pay this way, you will also need to include the following details:
- Your name, address, SSN/EIN, and phone number
- The current tax year and tax return
On Line 9, subtract Line 8 from Line 7. This is the amount that you owe. Note that if it exceeds $50,000, you cannot file Form 9465 electronically. Instead, you can complete IRS Form 433-F: Collection Information Statement and file it along with your form.
For most taxpayers, if the amount owed is between $25,000 and $50,000, there are two options:
- Complete Lines 13a and 13b on Form 9465 and agree to make monthly payments via direct debit
- Check Box 14 and agree to make payments via payroll deduction
If you check Box 14, you’ll need to complete, sign, and attach Form 2159, Payroll Deduction Agreement. This option isn’t available if you file the form electronically.
On Line 10, divide the amount on line 9 by 72.0. Enter the result.
On Line 11a, enter the amount that you can realistically pay each month. If possible, maximize your monthly payments to avoid overpaying on penalties and interest. If you are still paying on an existing installment agreement, the amount you enter here should represent the total amount that you plan to pay monthly.
If you do not list an amount here, the IRS will automatically calculate your monthly payments by dividing your total balance by 72.
If the amount that you list on Line 11a is less than the amount on Line 10, consider whether you can increase your payment to an amount that is equal to or greater than the amount on line 10. If so, enter your revised monthly payment on Line 11b.
If you can’t increase your payments, check the box under Line 11b. You will also need to attach Form 433-F. Note that if the amount on Line 11a or 11b is more than or equal to the amount on Line 10 and you owe between $25,000 and $50,000, you do not need to complete Form 433-F.
Yet, you will need to complete Lines 13 or 14.
On Line 12, enter the day that you want each month’s payment to be due. It cannot be later than the 28th of each month.
Lines 13a through 13c
Complete Lines 13a through 13c if you plan to make your payments via direct debit. You will enter your routing number and account number. Check the box if you’re a low-income taxpayer, and the IRS will reimburse your user fee.
Check the box at Line 14 if you want to make your payments via payroll deduction. You’ll also need to attach Form 2159, which includes a section for your employer to complete.
Taxpayers only need to complete Part II of Form 9465 if any of the following conditions apply:
- You’ve defaulted on an installment agreement in the past 12 months
- You owe between $25,000 and $50,000
- The amount on Line 11a or 11b is less than Line 10
Lines 15 through 20
On these lines, you’ll answer the IRS’ questions on:
- Country of residence
- Marital status
- Number of dependents
- People in your household
- Payroll schedule
- Net income per pay period
Lines 21 through 27
Lines 21 and 22 refer to income earned by your spouse. Only complete them if you are married and meet these conditions:
- You live with your spouse and share household expenses
- You live in a community property state
Lines 23 through 27 cover the following details:
- The number of vehicles you own
- Car payments
- Health insurance
- Court-ordered payments
Learn More About IRS Form 9465
It can be unnerving to discover that you owe more in taxes than you can pay all at once. If you find yourself in this situation, don’t hesitate to call our team of experienced tax attorneys.
We’ll help you navigate every part of the 9465 Form, making sure everything is accurate and complete. Contact Silver Tax Group today to learn more and discuss your tax-related questions.