Tax Form 9465: Installment Agreement Request

The IRS offers a solution with Tax Form 9465: Instalment Agreement Request. This form allows taxpayers to request a monthly payment plan that fits their budget and makes it easier to pay off their tax debt over time. In this blog post, we’ll break down everything you need to know about Tax Form 9465 and how to apply for an instalment agreement so that you can get back on track with your taxes without breaking the bank.

Ever wondered how much you owe as taxes every year? Well, while calculating taxes can be a task in itself, understanding the total amount of money for all the taxes owed by you is another ordeal. Understanding the aspect, IRS has a simple solution for those of you struggling with your taxes; the Tax Form 9465. So, what is this particular tax form and how does it assist you in resolving tax-related complications? Well, let us read on to know more.

Tax Form 9465: What is it all about?

Essentially the Tax Form 9465 is a document that you need to file in order to be able to formally request a monthly instalment payment plan in case you are not able to pay the amount that you owe from your federal tax return. Generally, it is recommended to pay a part of your tax debt before you opt for some payment assistance from the IRS to know about the leftover balance. The best part about Tax Form 9465 is that it allows the individual to avoid paying the lump sum amount immediately. Instead, you can pay the tax debt in the form of monthly instalments ranging within 60 months.

Who Needs to File them?

Tax Form 9465 is all the more important for those individuals who have an outstanding tax debt balance that cannot be paid back in full immediately. Also, the other reasons are:

• When the individual needs to manage a Trust Fund Recovery Penalty
• Certain taxes are owed to the employment that is about a business or trade which is no longer operational.

In case you fall into any of the above categories, then it is recommended that you contact the latest contact number offered on the current notice that you have received from the IRS to place the instalment agreement.

Read More : Tax Form 3520-A

When not to File Tax Form 9465

While the filing of Tax Form 9465 is valid when facing any of the above reasons, however, the same does not apply when you have the following to deal with:

• In case you are capable of paying the total amount within 120 days or less. 
• In case you wish to use the online payment agreement.
• The business owned by you is still operational and one needs to pay the employment or unemployment taxes

How to File the Tax Form 9465

The main procedure of filing the tax form depends upon the amount of money that you owe:

• If you Owe more than $ 50000: In this case, foremost, you need to send Tax Form 9465 via the mail. As you file the taxes, you simply need to attach the form to the front of the tax return. Also, the filing and subsequent submission can be done by physically going over to the office. This is quite convenient as one can conveniently file the taxes online and send the form separately. Also, bear in mind that along with filing Tax Form 9465 you also need to submit Form 433-F. This is because this form offers the IRS the financial information that is required by tax officials in order to determine your ability to clear your debts. Likewise providing proof f your income and living expenses also needs to be ‘shown’.
• If you Owe Less than $10000: In case your taxes are less than $10000, then there is a possibility that your request will be immediately approved by the IRS. This is applicable as long as the income taxes have been properly timed and filed. Also, one needs to make sure that the individual has not used an instalment payment plan within the last five years.

The Instructions: Tax Form 9465

Foremost, it is essential that the individual downloads Tax Form 9465 from the IRS website. As mentioned previously, in case you owe more than $50000, then you need to submit the IRS payment plan by mail itself. In this case, you will need to either download the file and print out the form, complete it, fill it and send it by mail:

Part 1: This is a section of Tax Form 9465, one needs to offer the IRS the form(s) to which your tax debt corresponds to. The other information and details in this part of the form include the name of the individual, Social Security Number, Address, and phone number. This is essential, as the IRS will also ask you in this part of the form about the best time to call you, hence, one needs to provide the best suitable timeframe for the same. In the case of the Joint tax return for which you need to request the payment plan, then you also need to provide the name and SSN of your spouse. Likewise, in case you are requesting an instalment agreement for a business which is no longer in operation then, you will need to provide the name of the business and the Employer Identification Number-EIN. Once the lines have been completed. Once done, it is required to calculate the Financial information and other details like the day you wish to make the monthly payments and also include the banking information in case of direct payments. Also, in case you wish to have the payments deducted from your payroll, then you will need to file Form 2159.

Part 2: This is the next section where you need to provide the IRS with the additional information in case of:

• The previous IRS payment plan has gone to default in the past 12 months. 
• The tax debt exceeds more than $25000 but less than $50000. 
• The amount from line 11a (or line 11b) is less than the amount on line 10.

Once you have met the above-mentioned conditions, you need to provide the details about your dependents, household expenses, and take-home pay, among others. While the instructions on Form 9465 are quite straightforward, it is advisable to go for some professional help as and when required. This is all the more important when you need to pay off the tax debt that can negatively affect your overall ‘taxation standing’ in the long run.

Where to Mail: Tax Form 9465

This generally depends upon the state you live in. It is here that one needs to send their instalment agreement request. For an easy location understanding one can easily check out the ‘Where to file’ section on the IRS website.

The Payment Installment Methods: What are they?

Did you know that there are various methods by which a taxpayer can repay the tax debt using the monthly instalment plan from the IRS? Here are some of the options that one can easily select the form for doing so:

• The Money order, check or credit card: $149 for the online payment, and $225 for the mail.
• Direct Debt: $31 for the online payment, $107 for the mail
• Payroll deduction instalment agreement: $ 120.

Likewise, the fees can easily be reduced or waived if you classify as a low-income taxpayer. In this case use Form 13844, Application for the Reduced User Fee for instalment Agreements, in order to determine the eligibility for a fee deduction on your payment plans. If you are accepted, the user fee can be reduced to $ 43; the best part is that this amount can also be waived off or reimbursed if the individual qualifies. For, this it is recommended that you update the instalment agreement online, in case the current payment schedule or amount does not work for you any longer. But, bear in mind that the IRS charges a fee of $ 89 to change the instalment agreement. Hence it is advised to make only those adjustments that are necessary so that you do not end up paying the fee multiple times. Likewise, one also has to know that the unpaid balance of your debt is also charged by the IRS on an interesting base, and there is a chance that you might also be subjected to the late fee once the due date has passed. 

The Interest Fee Linked to the Installment Payment Agreement

A daily compounding interest rate equivalent to the short-term federal funds along with a 3% is charged by the IRS, which is calculated for every quarter. Likewise, the tax officials can also charge a ‘failure-to-pay’ penalty which ranges. Bear in mind that the total penalties and the IRS payment plan interest rates can sum up to 9% to 12% on an annual basis. Hence, it is advised that the taxpayers need to be prepared to pay not only the principal balance but also the fees associated with the payment plan also. It is advisable to try and make more than the minimum required monthly payments in order to reduce the financial burden of the peripheral charges. Likewise, it is also a smart move to pay off as much of the tax debt as one can from the start so that the initial principal loan debt balance on the instalment plan is smaller. On doing this, you will only end up paying less in fees and interest for the duration of the instalment agreement.

When you don’t Pay your Tax Debt

In case one fails to pay the tax debt then the government has the legal right to seize the assets, garnish your wages and also take other steps to settle the debt. Likewise, a tax lien can also be filed by the government or place an official IRS levy on your assets. One can easily avoid such consequences by filing the instalment agreement request with Form 9465.

Note: It is advised to make all the required payments on time and by the required date as specified in your agreement. Generally, it is expected to make the required payments between the 1st and 28th of the month. In case you are late on any of the payments, then the account will be immediately in default which can result in more severe consequences.

Also Read : Tax Form 1120-F

Conclusion

Taxation can be a headache, but not when our team of experts are on your side to help you out. Also, you can receive a specific tax plan specially crafted for you in order to resolve your tax-related issues. In case of any doubts or queries, be sure to reach out to our team and we will be more than happy to help you out.

Frequently Asked Questions (FAQs)