When you owe taxes but can’t pay in full, the IRS offers a few different ways to help you stay compliant while avoiding aggressive collection actions. Whether you’re dealing with a CP14, CP504, or Final Notice of Intent to Levy, setting up an IRS payment plan (also called an installment agreement) could be your best next step.

At Polaris Tax & Accounting, we help taxpayers in Plantation, FL and beyond understand their payment plan options and get them approved without the stress.

When Do You Need an IRS Payment Plan?

If you can’t pay your full tax bill by the due date, you’re considered out of compliance. That means penalties and interest will begin to accrue, and the IRS may start collection action, including:

  • Wage garnishment
  • Bank levies
  • Tax liens

Setting up a payment plan puts a pause on those actions and brings you back into good standing—as long as you follow the terms of the agreement.

Types of IRS Payment Plans

The IRS offers a few types of agreements depending on how much you owe and how quickly you can repay it.

1. Short-Term Payment Plan (180 Days or Less)

If you owe less than $100,000, you may qualify for a short-term payment plan. These plans don’t require a formal agreement or setup fee, and you can pay via:

  • IRS Direct Pay
  • Check or money order
  • Debit card

2. Long-Term Installment Agreement (More than 180 Days)

For balances up to $50,000, you may be eligible to set up a streamlined agreement. This can often be done without submitting detailed financial disclosures.

  • Monthly payments
  • Can be auto-debited
  • Fees apply depending on how you apply and how you pay

3. Partial Payment Installment Agreement (PPIA)

If you can’t pay the full balance even over time, you may qualify for a Partial Payment Installment Agreement—where the IRS agrees to accept lower monthly payments.

This requires:

  • Full financial disclosure (Form 433-A or 433-F)
  • Proof of inability to pay
  • Annual financial review by the IRS

4. Non-Streamlined and Complex Agreements

If you owe over $50,000 or your financial situation is more complicated, the IRS may require:

  • A full collection information statement
  • Proof of expenses and assets
  • Negotiation of payment terms

This is where professional help becomes essential.

What Happens If You Default on an IRS Payment Plan?

If you miss payments or accrue new tax debt, your plan can go into default. That means:

  • You lose protection from collection activity
  • Interest and penalties resume
  • You may be barred from future agreements

Polaris helps you avoid default by building realistic payment strategies—and we monitor your account to address IRS notices before they escalate.

Benefits of a Payment Plan

  • Avoid enforced collection (levies, liens, garnishments)
  • Stop accruing penalties for failure to pay in full
  • Stay in good standing with the IRS
  • Protect your passport from being revoked due to serious tax debt

Not Sure Which Option Fits? We’ll Guide You.

Our Plantation-based firm helps individuals and small businesses:

  • Evaluate which plan they qualify for
  • Submit required financial documents
  • Negotiate payment terms with the IRS

Explore more of our tax resolution services:

Let Polaris Help You Get Back on Track

Dealing with the IRS doesn’t have to feel overwhelming. We’ve helped dozens of clients set up payment plans that give them peace of mind and protect their assets.

Ready to move forward? Schedule your consultation today.

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