The IRS recently introduced a new Simple Payment Plan designed to be more straightforward and accessible for individual taxpayers. This plan can be set up either online (at www.irs.gov) or with the assistance of an IRS employee. More than 90% of individuals with a tax balance due are expected to qualify. Best of all, if you’re eligible, no financial disclosure forms or lien determinations are required. This plan offers a longer payment period (which generally lowers the minimum required monthly payment that the streamlined installment agreement or other payment agreements require).
Who Qualifies?
To be eligible for a Simple Payment Plan, you must:
- Owe $50,000 or less in total assessed tax, penalties, and interest, and
- Be current with all required tax filings. The IRS requires a minimum of the six recent tax years to be filed. As of April 16, 2025, that would require filing tax years 2019 through 2024.
- Be able to make monthly payments sufficient in amount to fully pay off the tax, penalties, and interest before the 10-year collection statute of limitations (CSED) expires.
- Once the plan is approved, you are required to be compliant with future filings and payments during the duration of the payment plan. If you fail to file a future tax return and/or timely pay the balance due for that return, your payment plan can be defaulted (terminated) and you can face collection enforcement.
If you do not meet these criteria, there are other options that can be considered.
How to Pay
The most convenient and cost-effective method is to set up automatic monthly payments (Direct Debit) from your bank account. This option offers several benefits:
- Lower setup fees
- No need to write checks or buy stamps
- No trips to the post office
- Less of a chance for defaulting on your agreement due to a missed payment
Alternatively, if you prefer not to use Direct Debit, you can schedule and manage your payments through your IRS Online Account, including the option to make one-time payments via IRS Direct Pay.
Payment Duration
While most taxpayers have up to 10 years (the maximum period of the CSED) to pay off their balance, keep in mind that interest and penalties continue to accrue on the unpaid balance. To minimize total costs, it’s best to pay as much as you can as early as possible.
How to Get Started
You can apply for a Simple Payment Plan and choose your payment method through your IRS Online Account. There’s no need to call, mail forms, or visit an IRS office—everything can be handled securely and conveniently online. Of course, if you are not comfortable talking one-on-one with an IRS employee, I can certainly help you get this payment agreement set up.