IRS Payment Plans — Structure That Actually Works

The IRS offers payment plans for taxpayers who can't pay their balance in full.

What they don't tell you: the payment amount they propose is often arbitrary, unsustainable, and designed to fail within a year.

Most taxpayers accept whatever payment the IRS suggests without understanding they have options. Six months later, they're in default because the payment was too high to maintain.

We negotiate installment agreements based on what you can actually afford, not what the IRS initially demands.

Discuss Payment Plan Options

Talk to an Enrolled Agent | Review your cash flow | Get realistic payment terms

Types of IRS Payment Plans

Guaranteed Installment Agreement

If you owe $10,000 or less and can pay within three years, the IRS must accept your plan. No financial disclosure required.

Streamlined Installment Agreement

For balances up to $50,000 (as of 2025), the IRS offers streamlined approval. Pay the balance within 72 months.

Standard Installment Agreement

For balances over $50,000 or longer terms. Requires complete financial disclosure. Payment is based on your ability to pay.

Partial Payment Installment Agreement (PPIA)

Monthly payments that won't fully pay the balance before the collection statute expires. The remainder is uncollected.

IRS Payment Plan Information

What Determines Your Payment Amount

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Your Monthly Disposable Income

Calculated as your gross income minus the specific expenses allowed by the IRS under their Collection Financial Standards, not your actual budget.

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National and Local Standards

The IRS uses fixed amounts for essentials like food, housing, and transportation. They will disregard your actual expenses if they are higher than these standards.

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Your Asset Equity

You are expected to sell or borrow against assets like home equity before the IRS will agree to a long-term payment plan.

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Payment Term Limits

Payment plans are structured to collect the maximum possible amount before the 10-year collection statute expires.

Why Most Payment Plans Fail

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The Amount Is Too High

Payments are based on the IRS formula, not your real-world budget, making them unsustainable for many taxpayers over time.

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Expenses Change

Unexpected life events like medical bills, job loss, or rising childcare costs can make an already tight payment impossible to maintain.

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No Compliance Review

Falling behind on other tax obligations, like quarterly estimated taxes, will cause your existing payment agreement to default automatically.

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Penalties and Interest Continue

Your total debt keeps growing even while you make payments, which can make the balance feel unmanageable and overwhelming.

When We Do Recommend Representation

Your information is 100% secure and confidential. | No Obligation

Sustainable Agreements Structure

How We Structure Sustainable Agreements

Cash flow analysis first

We review your actual income and expenses to determine what payment you can realistically maintain long-term, not just for the next six months.

Compliance planning

If you have ongoing tax obligations (estimated payments, payroll taxes), we factor those into your payment capacity. An agreement that forces you into future non-compliance isn't sustainable.

Payment term strategy

Longer payment terms mean lower monthly payments but more total interest. We calculate the true cost and determine the optimal term.

Future expense projection

We consider known upcoming changes: kids starting college, lease expiring, predictable income changes. The goal is an agreement that survives real life.

Penalty abatement coordination

Reducing penalties before establishing a payment plan lowers your balance and your required monthly payment. We evaluate whether penalty relief should come first.

IRS Payment Guidance Sections

Navigating IRS Payments

Understand your options and protect your financial standing.

When to Challenge an IRS Payment Calculation

Actual Necessary Expenses

If your legitimate expenses (medical, court-ordered, etc.) exceed IRS standards, we document and argue for higher allowances.

Income Volatility

For seasonal or commission-based income, we argue for payments based on average or low-period income, not peak earnings.

Upcoming Income Changes

If you have a pending retirement, job change, or business contraction, we provide documentation to correct income projections.

Asset Liquidation Impossibility

If you've been denied credit or liquidation would cause undue hardship, we build a case against borrowing against assets.

Alternatives If You Can't Afford Any Payment

  • Currently Not Collectible (CNC) Status: The IRS suspends collection due to inability to pay.
  • Offer in Compromise: Settle for less than the full balance if future payments are not feasible.
  • Bankruptcy: Discharge tax debt in limited circumstances, requires meeting specific criteria.
  • Waiting Out the Statute: The IRS collection statute is generally 10 years; the debt may expire.

What Happens If You Default

  • Immediate Reinstatement of Collection: The IRS can resume wage garnishment and bank levies without warning.
  • Loss of Installment Agreement Rights: You may lose the ability to get another streamlined agreement.
  • Additional Penalties: New penalties may be assessed for non-payment during the default period.
  • Difficulty Getting Reinstated: The IRS is less willing to reinstate agreements for those who have defaulted before.

If you default, contact us immediately. We can sometimes negotiate reinstatement or alternative arrangements before enforcement resumes.

Tax Consultation Section

Start with a Payment Analysis

Before you agree to an IRS payment plan, find out what you can actually afford and what terms make sense. We'll review your income, expenses, and obligations to structure a payment you can maintain without forcing non-compliance or financial crisis.

Speak directly with a licensed Enrolled Agent who can evaluate sustainable payment options. Confidential. No obligation.

Disclaimer

Disclaimer

Payment plan approval depends on your financial situation and IRS review. While we negotiate for the most favorable terms possible, final payment amounts and approval are at IRS discretion. Compliance with all tax obligations is required to maintain any installment agreement.

Contact us.

📧 info@simonsgroup.net
📞 (202) 495-1404

📍 Serving all of New York — NYC, Brooklyn, Buffalo, Rochester, Albany, and surrounding areas