There can only be one installment payment agreement that includes all the tax years for which you owe an outstanding tax debt. A new tax balance due would automatically default on your current installment payment agreement. Your specific tax situation will determine what payment options are available to you. Payment options include full payment, a short-term payment plan (pay in 180 days or less) or a long-term payment plan (installment agreement) (monthly payment).
When you are in a tax situation with the Internal Revenue Service, the first notice you will receive will be a request to pay the entire tax debt. Usually, this request comes with a miniscule amount of time to make that payment. If you're like most taxpayers and can't pay your taxes, you may qualify for relief through an installment agreement with the Internal Revenue Service. Establishing a monthly payment plan with the Internal Revenue Service is one of the easiest ways to comply with the Internal Revenue Service and pay back federal taxes.
When you are assigned an installment payment agreement, all additional collection actions, such as bank taxes, wage garnishment or seizure of assets, will cease. However, the Internal Revenue Service will constantly charge penalties and interest to your account until it is paid in full. There are numerous payment options for an installment agreement with the Internal Revenue Service and it depends mainly on the balance you owe. You can set up a long-term payment plan (120 days or more) or a short-term (120 days or less) payment plan.
You can only have one installment payment agreement in your account at a time. In general, you can choose what you pay each month. That is, the IRS will ask you how much you can pay. However, if you have a long-term repayment plan, you should choose a payment amount that pays off your debt within 72 months.
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