What is Form 9465?
Form 9465 is an IRS tax form used by taxpayers to request a monthly installment agreement (or payment plan) for outstanding tax liabilities. The form serves as a proposal to the IRS to pay off tax debts over time, rather than in a single lump sum. The request for a payment plan must be proposed on Form 9465, which will be approved if you have no delinquent taxes, and if your ability to pay is determined to be < $50 per month.
Your ability to pay will be governed by your AGI and standard deduction . The proposed monthly payment plan can be made through deductions or by ACH debit on your bank account on a monthly basis.
Your ability to enter into a payment plan will also depend on the total amount of tax debt owed. The threshold amount that triggers special treatment under this provision is $50,000. In your case, you will be required to file a financial statement in support of the proposed payment plan, and the payment plan will be calculated based on your income and expenses.
IRS Form 9465 is for the novice and the experienced tax professionals.
Who Can Qualify for Form 9465?
So who can utilize the benefits of this form? In order to qualify, you must owe more than $50 and less than $25,000.00. If you do not owe that much, or you owe more than this threshold, you will have to enter into a negotiated agreement with the IRS. Also, it goes without saying, but a taxpayer must have filed the corresponding return for this request to be processed or granted. And, if an exact dollar amount is not provided with the request Form 9465, it could be rejected. Finally, if you have failed to comply with previous agreements with the IRS, you may not be eligible to use a Form 9465.
Filing Form 9465 Online
Filling out Form 9465, "Installment Agreement Request," online is an excellent way to quickly complete the important business of establishing a monthly payment plan with the IRS. While there is nothing especially tricky about filling out the online form, it’s possible on paper (printed form) to read instructions instead of filling everything in yourself — after all, you’ve got to write out everything on the printed form anyway. The online version beams with modern technology and the assistance it can provide to speed your completion — so trust this step-by-step.
Step 1: Basic Information
The first step is to establish who you are, by supplying three pieces of basic contact information:
Step 2: Tax Information
Your second step is to tell the IRS which tax year or years you currently owe money for, and how much you owe for each.
Step 3: Monthly Payment Amount
You’ll need to know how much you can afford to pay to the IRS on a monthly basis.
Step 4: Bank Account Information
Finally, you’ll need to supply the IRS with the bank account information they’ll use to automatically deduct your monthly payments.
That’s the entire form. The IRS will subsequently send you a payment schedule, which you can accept as-is, propose a different amount and request a lower monthly minimum payment, or ignore if you can afford the payments.
How to Submit Form 9465 Online in 3 Steps
When you submit Form 9465 – the IRS’ Installment Agreement Request, you have two methods to choose from. You could submit paper Form 9465 as part of your tax return, or submit your form online using the IRS Online Payment Agreement form. Let’s take a look at the submission process for the online method.
First, you need to bring up the Online Payment Agreement page. You’ll find a link to this payment agreement request program on the IRS website. From there, you have to click "Start Here". The first step is to provide the information for the tax year you owe. This information must match exactly what the IRS has on their records including your filing status, name(s) (including a second person’s name, if applicable), your Social Security Number, and the primary ZIP code on the return.
The next step requires that you enter in your filing details. This includes the tax year, estimated amount owed, your filing details, and the way the return was filed (electronically or with a tax software program). The next step is to answer the important question of whether the tax return has been filed. If it hasn’t, you’re not quite ready to submit because you need to first file your return. The next question you will come across is whether you owe more than or less than what you entered in Step 2. If you owe less than you originally entered, the IRS will consider it as a change in the requested amount owed. You may have to settle for a payment option that requires payment in full, given this change.
The next page is about whether you owe other federal taxes. You are asked about the following types of federal tax:
If you owe any of these taxes, you may have to explore the possibility of entering into an installment agreement for these other types of taxes. If you do not owe any of these taxes, you can read and agree to some statements, confirming that the information you’ve provided is true and accurate, before proceeding.
After completing this portion of the page, you will be directed to the final page. This page asks for your account number (bank account for direct payments), routing number, and type of bank account. You can choose between the dates of the 1st, 5th, or 15th of the month for when you would like the payment to be made, and then you must identify your type of income (e.g. jobs, pensions, rental income, businesses, self-employment, or others). Depending on your type of income, you may have to provide physical copies or scanned images of the documents such as paystubs and bank statements, etc. to prove your claim. You have the option here to change the payment term to include the number of months you want to make the payment. Be aware that once you’ve made it past this step, you cannot go back and change it.
The last steps are relatively simple. Make sure to read the privacy notice before you continue, check the box to confirm that you’ve provided truthful information, and agree to the agreement requested. After you submit your request, you will receive notifications from the IRS about whether the request has been granted.
Why Choose the Online Payment Agreement
Using the online payment agreement is generally much more convenient than any other method for applying for an installment agreement. It is particularly useful if you are trying to handle your finances on your own, without having to meet personally with a tax representative, a financial advisor, or the IRS. Plus, it also lets you pay taxes on your own terms and on your own time frame, with a variety of options for monthly payments and payment periods that could run as long as 72 months (six years). And the convenience doesn’t stop there.
Form 9465 is easy to electronically file from your home computer. It only takes a few minutes, as long as you have the necessary information available immediately. Filing the form is as simple as answering a few questions on each page and digitally signing the form, just like filing your returns and making payments online to the IRS.
The I-Owe-It-Today Payment Agreement Portal lets you choose the date on which the payment will be debited from your bank account . You’ll have the option of selecting a specific date or the day after the form has been filed. In most cases, you’ll need to have enough in your account on the date chosen for payment.
Note that if the payment date falls on a weekend or holiday, the payment will be debited from your checking account on the next business day. Notably, if you are setting up a direct debit installment agreement for your tax liability, you can set a future pay begin date within 30 days of the date that you are filing the form for an installment agreement. You will still need to have sufficient funds in your account when the agreed amount is required to be withdrawn by the IRS.
Access to the system and your return or payment information is fast. The system will pull up all your personal information when you enter your Social Security number or Individual Taxpayer Identification Number. Even your unpaid tax amounts, plus penalties or interest, can be downloaded into the online form. Or you can enter this information manually, entering amounts and other information directly on each page.
Basics of IRS Payment Plans Through Form 9465
Form 9465 lays out four different types of payment plans (also called "installment agreements"):
1. Streamlined
This type of agreement applies when you don’t owe more than $50,000 in combined income tax, penalties and interest. In addition, you must be current with your required payments whether made through withholding or estimated taxes. You can avoid the User Fee for entering into the agreement if you agree to have the tax due deducted from your bank account through a Direct Debit Installment Agreement (DDIA). However, the IRS will allow you to make payments without having them made automatically for a User Fee of just $52.
2. Regular
Form 9465 defines a regular installment agreement as following:
An installment agreement that: requires you to pay by check or money order; is not made for a specific period of time; and provides that the amount you pay under the agreement is determined without regard to your ability to pay the tax.
3. Partial Pay
Form 9465 defines a partial pay agreement as following:
An installment agreement that will not fully pay the balance due and requires you to pay less than the full amount of tax, penalties and interest due.
4. In-Business Trust Fund Express
An Installment Agreement that meets the criteria for an "In-Business Trust Fund" agreement and is entered into with the IRS through the Collection Field Function. The Trust Fund taxes are the following: income tax withheld and both the employee’s share and the employer’s share of Federal Insurance Contributions Act (FICA) taxes.
Common Form 9465 Mistakes and How to Avoid Them
When navigating controversial IRS payment plans, it is easy to make a misstep that will land the taxpayer in harsher repayment terms than they may have been expecting. Mistakes on Form 9465, particularly, can be simple but devastating. To avoid this, taxpayers should take note of a few common oversights: One of the biggest errors taxpayers make when completing Form 9465 is forgetting to sign the form. While this may seem simple, as any admissions counsel can tell you, a signature on a contract may be even more essential than just being valid. Signatures also, however, need to be added in the correct locations. For example, if a taxpayer is filing jointly, both individuals need to sign the form to gain the IRS approval. If this does not happen, the payment plan will only be approved for the primary taxpayer who signed in the correct place, not both. Who is filing the form? When both spouses file jointly, there should, at first, be only one of the taxpayers completing the form and submitting the additional documentation to the IRS. However, if for some reason a joint filing is not possible, separate forms may need to be submitted. Also, if multiple years are filed separately, for whatever reason, than they should be filed separately for the payment agreement as well. It is critical that the taxpayer does not fail to submit the return with the request. This can cause a delayed approval, or even disapproval. If you are unable to pay the taxes then IRS may consider your financial situation and current obstacles to getting employment. However, they may enforce a wage garnishment until the issue is resolved. Some taxpayers forget to make the required initial payment. Yes, an initial payment is mandatory. Having no funds to pay back taxes will cause for a delay in the approval process, unless the taxpayer can prove that there is no way to make this payment. Some mistakes are simple – such as providing incorrect numbers or estimates in connection with expenses, income and tax owed; incorrect Social Security numbers and incorrectly entering the year of the tax that is owed. These can easily be avoided by taking extreme caution when entering information onto the form.
Form 9465 Online Payment Agreement: FAQ
How long does it take to get approved?
Most of the time, it will take around 30 days to process your request and set up a payment plan. The IRS will send you a notice in the mail with the details.
Will it be necessary to provide any additional information?
Normally, you don’t have to supply any extra information during the online application process. In some rare instances, filing a collection information statement Form 433-F might be required. You should also be aware that the IRS may request tax return transcripts if you owe taxes for prior years. Sometimes, you won’t get approved for the payment plan right away, and instead, you might receive notice that your request is being processed but it requires an IRS review.
How do I find out if my payment plan application has been approved?
The IRS will send a letter by mail that provides details of your approved payment plan.
What If I Don’t Make A Payment On Time?
If you miss a payment, its not a big problem. Payments can be made online or over the phone through the payment process established through the Electronic Federal Tax Payment System (EFTPS). You can use this system year-round on a single payment basis or to set up monthly installment payments . If you are unable to make a timely payment, the IRS will send you a bill, including penalties and interest, but most of the time, they won’t formally terminate the plan over a single missed payment. Its important to keep the form 9465 agreement in mind because this is the document that gives the IRS permission to review your income, expenses and assets. They may ask you for more information about your financial situation, which could lead to negotiation of your payment plan terms.
I’m expecting a refund from the IRS, can they intercept it or take some of it for back taxes owed?
They can. Under normal circumstances, and especially for certain tax credits, the IRS refunds are applied to any outstanding account balance.
What If My financial situation changes and I can no longer pay?
If a change of financial situation occurs, you need to notify the IRS as soon as possible. A penalty might be applied if your payment changes include a failure to notify the IRS of a change within 30 days of the event. Changes in your financial situation include things like divorce, job loss, illness or other financial hardships. You can notify the IRS by writing a letter and sending it by mail or fax, and you must stop making payments until you receive a response. The IRS might request additional information or make a decision in response to your request, and you’ll then receive their decision by mail.