26 U.S.C. § 6159
§ 6159. Agreements for payment of tax liability in installments
Explainer
Can't pay your tax bill? IRS payment plans
The IRS lets you pay a tax bill in monthly installments. If you owe $50,000 or less, you can usually set up a plan online in minutes. A plan stops most collection, and if you filed on time it halves the late-payment penalty.
In plain English
Section 6159 lets the IRS accept your tax in installments. For most people it's the simplest way out of a balance they can't pay at once, and the IRS approves most requests from individuals who are up to date on their returns.
While a plan is in place:
- The IRS generally can't levy your wages or bank account for that debt.
- If you filed your return on time, the late-payment penalty drops from 0.5% to 0.25% a month.
- Interest still runs on the unpaid balance, so paying it off sooner costs less.
Who it touches
Anyone with a balance due, typically after a CP14 or later notice. Freelancers who didn't make are common users.
The rules
| Plan | Who it's for | Notes |
|---|---|---|
| Short-term plan | Pay in full within 180 days | No setup fee. Interest and penalties keep running until paid. |
| Long-term plan, online | Individuals owing $50,000 or less in combined tax, penalties and interest | Apply on IRS.gov and get an answer at once. There's a setup fee, lower if you pay by automatic debit. Low-income taxpayers pay no fee with automatic debit, and otherwise get it refunded once the plan is completed. |
| Long-term plan, by phone or Form 9465 | Larger balances, or if you can't use the online tool | Above $50,000 the IRS may ask for a financial statement (Form 433-F). |
| Guaranteed plan | You owe $10,000 or less in tax, can pay it within 3 years, and had no late filing, late payment or payment plan in the past 5 years, can't pay in full now, and agree to file and pay on time while the plan runs | The law requires the IRS to say yes. |
To keep the plan: pay each installment on time, file every future return on time, and pay future taxes in full. Missing a payment can lead to default and collection, but the IRS usually sends a notice first, and you can often reinstate.
If you can't afford any plan, ask about currently not collectible status (collection pauses while you can't pay) or an offer in compromise, which settles for less than the full amount when you can't realistically pay it all (section 7122).
Worked example
Sam, a freelancer, owes $6,400 after filing his 2026 return on time on April 15, 2027.
- He applies online for a long-term plan at $300 a month by automatic debit.
- The late-payment penalty runs at 0.25% a month instead of 0.5%, about $16 a month at the start and less as the balance falls.
- Assuming interest of about 7% a year, he pays it off in roughly 2 years, at a total extra cost of around $700, about 30% of it penalty.
Watch out for
- Future refunds are applied to the balance until it's paid off.
- A federal tax lien may still be filed for larger balances, generally above $50,000.
- Payment plans for business payroll taxes have different, stricter rules.
Draft explainer. Figures checked against IRS Rev. Proc. 2025-32 and the current text on November 5, 2026. Not yet reviewed by a licensed tax professional.
History
Added in 1988 by the Technical and Miscellaneous Revenue Act of 1988. Last changed February 9, 2018 by the Bipartisan Budget Act of 2018.
Every change, newest first (7)
- February 9, 2018Bipartisan Budget Act of 2018
- May 17, 2006Public Law 109-222
- October 22, 2004American Jobs Creation Act of 2004
- October 21, 1998Public Law 105-277
- July 22, 1998IRS Restructuring and Reform Act of 1998
- July 30, 1996Public Law 104-168
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
- (a) Authorization of agreements
- (b) Extent to which agreements remain in effect
- (c) Secretary required to enter into installment agreements in certain cases
- (d) Secretary required to review installment agreements for partial collection every two years
- (e) Administrative review
- (f) Installment agreement fees
- (g) Cross reference
The Secretary is authorized to enter into written agreements with any taxpayer under which such taxpayer is allowed to make payment on any tax in installment payments if the Secretary determines that such agreement will facilitate full or partial collection of such liability.
Except as otherwise provided in this subsection, any agreement entered into by the Secretary under subsection (a) shall remain in effect for the term of the agreement.
The Secretary may terminate any agreement entered into by the Secretary under subsection (a) if—
information which the taxpayer provided to the Secretary prior to the date such agreement was entered into was inaccurate or incomplete, or
the Secretary believes that collection of any tax to which an agreement under this section relates is in jeopardy.
If the Secretary makes a determination that the financial condition of a taxpayer with whom the Secretary has entered into an agreement under subsection (a) has significantly changed, the Secretary may alter, modify, or terminate such agreement.
The Secretary may alter, modify, or terminate an agreement entered into by the Secretary under subsection (a) in the case of the failure of the taxpayer—
to pay any installment at the time such installment payment is due under such agreement,
to pay any other tax liability at the time such liability is due, or
to provide a financial condition update as requested by the Secretary.
The Secretary may not take any action under paragraph (2), (3), or (4) unless—
a notice of such action is provided to the taxpayer not later than the day 30 days before the date of such action, and
such notice includes an explanation why the Secretary intends to take such action.
The preceding sentence shall not apply in any case in which the Secretary believes that collection of any tax to which an agreement under this section relates is in jeopardy.
In the case of a liability for tax of an individual under subtitle A, the Secretary shall enter into an agreement to accept the full payment of such tax in installments if, as of the date the individual offers to enter into the agreement—
the aggregate amount of such liability (determined without regard to interest, penalties, additions to the tax, and additional amounts) does not exceed $10,000;
the taxpayer (and, if such liability relates to a joint return, the taxpayer’s spouse) has not, during any of the preceding 5 taxable years—
failed to file any return of tax imposed by subtitle A;
failed to pay any tax required to be shown on any such return; or
entered into an installment agreement under this section for payment of any tax imposed by subtitle A,
the Secretary determines that the taxpayer is financially unable to pay such liability in full when due (and the taxpayer submits such information as the Secretary may require to make such determination);
the agreement requires full payment of such liability within 3 years; and
the taxpayer agrees to comply with the provisions of this title for the period such agreement is in effect.
In the case of an agreement entered into by the Secretary under subsection (a) for partial collection of a tax liability, the Secretary shall review the agreement at least once every 2 years.
The Secretary shall establish procedures for an independent administrative review of terminations of installment agreements under this section for taxpayers who request such a review.
The amount of any fee imposed on an installment agreement under this section may not exceed the amount of such fee as in effect on the date of the enactment of this subsection.
In the case of any taxpayer with an adjusted gross income, as determined for the most recent year for which such information is available, which does not exceed 250 percent of the applicable poverty level (as determined by the Secretary)—
if the taxpayer has agreed to make payments under the installment agreement by electronic payment through a debit instrument, no fee shall be imposed on an installment agreement under this section, and
if the taxpayer is unable to make payments under the installment agreement by electronic payment through a debit instrument, the Secretary shall, upon completion of the installment agreement, pay the taxpayer an amount equal to any such fees imposed.
For rights to administrative review and appeal, see section 7122(e).