Do you or someone you love owe the IRS money for your unpaid taxes? Have you heard about IRS form payment plan 9465, but you aren’t sure if you need to file it? If you know that you need to file this form, but you aren’t sure why you need it or the importance of this document, you came to the right place.
If you owe the IRS money, you will want to speak with them about your payment plan options so that you don’t continue to incur fees. Continue reading below to learn more about this form and who you can contact to walk you through filling it.
What Is the IRS Form Payment Plan 9465?
If you owe on your federal tax return, you have a couple of options for how to pay it back. You can either pay the entire amount upfront or request a monthly installment plan.
IRS Form payment plan 9465 is a document you can file to request said payment plan. It is a good idea to at least pay a portion of our tax debt before asking for the payment plan. With this form, you can arrange to pay what you owe within 60 months.
Importance of IRS Form Payment Plan 9465
This form allows you to pay off your tax debt if you don’t have a large lump sum of money on hand. This is very beneficial for people who need a more manageable way to settle their debt with the IRS.
Who Should File This Form?
Although this form is primarily reserved for those with an outstanding tax debt they can’t pay right away, those who manage a trust fund recovery penalty can also file form 9465. If you also owe employment taxes to a business that no longer is in business, you too can use this form.
If you want to file an online payment agreement, you don’t need to file this form physically. You can just go to the IRS’s website and complete the payment agreement.
Who Shouldn’t Use Form 9465
If you owe more than $50,000 in taxes, you must use this form when you file. You won’t be able to apply for a payment plan online if you owe $50,000 or more in taxes. Regardless of how much you owe in taxes, you also won’t need to file this form if you can pay your debt off within 120 days.
If your business is still in business and you need to create a payment plan for unemployment or employment taxes, this form is not for you. You will need to call the number listed on your most recent notice.
How to File Form 9465
To file this form on paper, you can click on the pdf link on the Internal Revenue System’s website page. You can either fill in the information on your computer via Adobe (or whichever PDF software you use) or print it out and write in the information.
Once that is complete, you will want to send the form to the IRS. You can file this form and send it on its own, or you can submit the form with your return if you can’t pay your tax liability all at once.
There are some tax preparation software out there that you can use to file your document, but you may want to reach out to a tax attorney to help you sort out the document. If you file any errors, it could result in a fine or other severe penalties.
Form 9465 Part One
There are two parts of Form 9465 that you must fill out completely before sending it back to the IRS. Under the first part of the form, you will need to notate which tax return you filed in addition to your personal contact information.
Additional personal information needed on Part One:
- Social Security Number
- Business Name (if applicable)
- Name of your bank or other financial institution
- Name of your employer
Another section on the form will ask you how much you owe, how much you are currently paying back, and how much you can afford to pay each month. In general, you must be able to pay off your debt within 72 months unless the statute of collection expires before that date.
You can set up automatic payments at the end of Part One if you want. To do that, you will need to provide the IRS with your bank’s accounting and routing numbers. If you prefer to have the IRS take your payment from your paycheck, you need to fill out Form 2159.
Form 9465 Part Two
The second part of this form only applies to those who owe between $25,000 and $50,000, and you’ve defaulted on a payment plan you previously made. In Part Two, you will need to input information about your household.
Household information required:
- Country of residence
- Marital status
- Number of people in your home over 65
- Number of dependents
- Health insurance
- Court-ordered payments (if applicable)
- Monthly child care cost (if applicable)
You will need to supply information about your income and how often you receive income. If you are married, you will need to provide information about your spouse and if the both of you share expenses.
In Part Two, if you have any vehicles, they must go on the form too. Make sure to include their financing information if you have a lienholder over the cars.
There are certain cases where the IRS will want more details about your financial situation. If they do, you must file Form 433-F along with Form 9465. Form 433-F asks you questions about your personal finances so the IRS can check to see if you qualify for a different type of payment arrangement.
Situations where you need to file Form 433-F:
- You owe more than $50,000
- You can’t pay your tax debt within 72 months
- You owe less than $50,000 but more than $25,000, and you don’t want to have the IRS directly deduct your payment from an account
To reduce paperwork for both the IRS and the taxpayer, the active legislature allows you to request a payment plan without filing this form, as long as your debt is less than $250,000.
The IRS will just place a lien on your assets in this type of situation. Keep in mind that the IRS may still ask for Form 433-F. Everyone’s situation is different.
IRS Payment Installment Methods?
There are several different ways you can repay your monthly tax debt to the IRS. It is important to note that each method comes with its own fee. For example, if you plan on paying them back with a check, credit card, or money order, there is a $149 fee if you pay online. If you pay via mail with your credit card, check, or money order, you will need to include a $225 fee.
Direct debits add an additional online fee of $31. If you want your direct debit sent via mail to the IRS, there is a $107 fee. Payroll deduction installation plans come with a $120 installment agreement plan fee.
Fee Adjustments and Aid
If the IRS classifies you as low income, you may be able to have your fees reduced or waived. You must use Form 13844 to determine your eligibility for a fee reduction for your payment plan.
If they accept you, your user fee will reduce to $43. Depending on your financial situation, the IRS could waive that $43 or reimburse it back to you.
If you want to change your current payment schedule, you can update your agreement online. Be aware that if you’re going to change the installment agreement, there is an associated $89 fee. The IRS also charges interest on your debt’s balance, and you may be held liable for late fees on any past-due payments.
Interest Fees and Installment Plans
Your installment payment agreement plan comes with interest, as with most payment plans. The IRS charges a daily compounding interest rate. The IRS calculates this tax rate each quarter, and they may also charge you with a failure to pay penalty, which ranges based on your situation.
It is crucial to remember that the IRS payment plan interest rate can add up to 11% each year. With that said, be prepared to pay these interest rate fees in addition to your tax liability.
To minimize how much you pay in interest, make sure that you do your best to pay more each month. This will help you reduce your initial principal loan debt balance.
What Happens if I Don’t Pay My Tax Liability?
If you fail to pay your taxes, the government can garnish your wages, seize assets, and take other measures to recoup the debt you owe. They may also file a tax lien or put an IRS levy on your assets.
To avoid this from happening, make sure you contact the IRS as soon as possible to create a payment plan. When you have your payment plan, make sure that you make your payments on time. If you fail to make your payments on time, your account will go into default, and you may suffer severe consequences.
Alternatives to Form 9465
If you don’t want to file Form 9465, you might qualify for a different alternative. As mentioned earlier, if you can pay the debt within 120 days, you can just call the IRS and set that up. Another option is applying for a payment plan if you owe less than $50,000.
Request an Offer in Compromise
If you wish to settle your debt for less than you owe, you can submit an offer in compromise. To apply, you will need Form 656. It may be best to consult a tax attorney to walk you through this process.
There are a lot of documents that you must have on hand, and you will have to negotiate with the IRS to get a lower settlement. Dealing with the IRS on your own may not seem ideal unless you have court experience or years of experience negotiating with government entities.
You can only discharge some of your tax liability through bankruptcy. When you file for bankruptcy, the courts will issue a stay that prevents the IRS from pursuing collection actions against you for a period of time.
As mentioned earlier, if you qualify as low income, you can reduce or waive your payment plan fee. If you cannot afford your basic living expenses in addition to your tax bill, you can apply for hardship status. Working with a reputable tax attorney can help you obtain this status if you meet the requirements.
Should I Work With a Tax Attorney?
Although you don’t need an attorney to help you file your form or create your payment plan, you could still benefit from reaching out to an attorney, especially if you have a complicated case. Even if your case is not complex, there are some situations where you could qualify for aid you aren’t aware of. In the event that you need someone to negotiate and send in an offer in compromise, you’ll want to make sure an attorney negotiates the best deal for you and your situation.
IRS Form Payment Plan 9465 Assistance
Finding out that you owe the government money can quickly become an overwhelming and stressful situation. Not only will you most likely be upset, but you will also owe more money in penalties. To avoid all of that from happening, you can reach out to a reputable tax attorney to take care of the IRS on your behalf. Contact us now if you are ready to file your IRS form payment plan 9465 and need help with your situation.