Updating Your Existing Payment Plan is Easier Now with the IRS

If you currently have a payment plan, or an installment agreement, with the IRS to payoff the tax balance you owe, the IRS now allows you to make some changes to your payment plan on your own using the IRS Online Payment Agreement tool . The tool allows you to make the following changes to your plan:

Change your monthly payment amount
Change your monthly payment due date
Convert an existing agreement to a Direct Debit agreement
Change the bank routing and account number on a Direct Debit agreement
Reinstate after default

Changing your monthly payment due date and changing your bank routing and account number requires you to follow the prompts, make your changes, and then submit them. But there a few points to keep in mind when making the other changes to your plan.

Change Payment Plan to Direct Debit Agreement

A direct debit agreement means you are allowing the IRS to take your monthly payments directly from your bank account instead of mailing in the payment or physically making your payments each month. The Online Payment Agreement tool will ask you to enter your bank routing and account number to make this change. The payments will continue to automatically come out of your bank account until you go back into the Online Payment Agreement tool to either change the bank account information or remove it.

Change Monthly Payment Amount

When changing the monthly payment amount, the amount you want to pay must meet the requirements provided by the prompts of the Online Payment Agreement tool. If the amount you want to pay is too low to meet the required monthly payment amount, the tool will prompt you to fill out either Form 433-F Collection Information Statement for Individuals or Form 433-B Collection Information Statement for Businesses and tell you how to submit those forms to request a modify payment agreement that you can afford.

Reinstate Payment Plan after Default

If you miss a monthly payment, the best thing for you to do is to make the payment as soon as possible. Use the Online Payment Agreement tool to restart your payment plan. If you have not paid for some time, the IRS will mail Notice CP523 – Intent to Terminate Installment Agreement . Do not ignore the notice. Call the number on your notice and ask to remain in your payment plan. Have your notice with you during the call.

Being able to use the Online Payment Agreement tool to manage your payment plan is convenient as well as very cost effective. The IRS will charge you only a $10 fee per revision to your payment plan when done through the tool versus a $89 fee per revision when changing your plan over the phone or through the mail. Reinstating your payment plan may result in an additional reinstatement fee. But overall, the Online Payment Agreement tool saves you dollars and time when changing your payment plan.

If you ever need additional assistance when it comes to your tax debt with the IRS or if you did not qualify for a payment plan through the IRS Online Payment Agreement tool, schedule an initial case review consultation where we can determine how we can handle your taxes for you.