Form 9465, also known as the Installment Agreement Request form, is a document that taxpayers can use to apply for an IRS installment plan through the mail. This form is also helpful in preparing for an online payment plan application by providing essential information. To assist you in navigating this process, this guide explains the basics of Form 9465.
Who Should Use Form 9465?
Individual taxpayers and representatives of businesses that are no longer operational can use Form 9465. If you owe $50,000 or less in tax, interest, and penalties, you can apply for a payment plan online or using this form. However, if you owe more than $50,000, you must use this form to request an installment agreement.
Form 9465 Part I: Installment Agreement Request
Part I of Form 9465 requires basic information that the IRS needs to establish a payment agreement. The following details need to be provided:
- Name, address, and phone number
- Name of the business that is no longer operational
- Total amount due
- Additional amounts due, including back taxes in an existing payment agreement
- The monthly payment you are offering to make
If you want to make payments through direct debit, you need to include your routing and account number. This form can also be used to request the withholding of payments from your paycheck.
Minimum Monthly Payment for IRS Installment Agreement
Form 9465 helps calculate the minimum payment the IRS will accept on your payment agreement. To determine the minimum payment, subtract any payments you are including with the application from your total balance due. Then, divide the result by 72. This calculation will give you the monthly payment if you take six years to pay off your back taxes.
Suppose you owe $15,400 and include a down payment of $1,000. In that case, your minimum monthly payment will be $200. Ideally, you should pay a little more than this amount to ensure your payment also covers interest and penalties.
Form 9465 Part II: Additional Information
Some taxpayers need to include additional information on Form 9465, Part II (Additional Information). If you cannot afford to pay the minimum amount, have defaulted on an installment agreement in the last 12 months, and owe over $25,000, you need to provide the following details:
- Country of residence
- Marital status
- Whether you share household expenses with your spouse
- Number of dependents on your tax return
- People in your house aged 65 and older
- Pay periods
- Net income per pay period
- How often your spouse gets paid
- Your spouse’s take-home pay
- Number of vehicles you own
- Monthly car payments
- Health insurance premiums
- Court-ordered payments
- Child or dependent care expenses
This information helps the IRS gain a better understanding of your income and obligations. Some taxpayers may also need to include Form 433-F with their payment plan requests.
Who Needs to File Form 433-F (Collection Information Statement)
Taxpayers who cannot make the minimum monthly payment, owe more than $25,000, and do not want to set up direct debit, or owe more than $50,000 must file Form 433-F (Collection Information Statement) with Form 9465. Form 433-F requires detailed information about your assets, debts, income, and expenses, giving the IRS a more complete look at your finances.
Making Payments through Payroll Deduction
If you prefer, you can opt to pay your installment agreement through a payroll deduction. This means that your employer will directly withhold the payments from your paycheck and remit them to the IRS on your behalf.
To choose this option, simply check the box on line 14 of Form 9465. This box can be found at the bottom of page one, above your signature. Additionally, include Form 2159 (Payroll Deduction Agreement) with your application. This form has sections for both you and your employer to complete.
User Fee when Filing Form 9465
When applying for an installment agreement, the IRS charges a user fee to taxpayers. As of 2022, the user fee is $107 if you opt for direct debit and $225 for other payment methods. However, if you apply online instead of using Form 9465, the fees are only $31 and $149, respectively.
You can have the user fee waived by checking the box on line 13c. The IRS waives the user fee for low-income taxpayers who qualify and set up direct debit. If you are eligible for low-income but unable to set up direct debit, the fee is $43, but the IRS may reimburse you at the end of your installment agreement.
Getting Help with Your IRS Installment Agreement Application
Dealing with past due taxes can be daunting and complicated, but you don’t have to face it alone. The tax accountants at The ACCUTAXINC is here to help you apply for a payment plan or explore other resolution options that work for you.
Don’t wait for the IRS to take collection actions against you. Get help now by contacting us today.