Installment Agreement (IA)

There are a number of ways to come to an agreement with the IRS.  One way is to agree to an Installment Agreement (Full Pay Installment Agreement or Partial Pay Installment Agreement).  Depending on your circumstances, an installment agreement can give you up to 72 months to pay, but you must owe the IRS $50,000 or less to qualify. You can file the IRS Form 9465, which is an Installment Agreement Request, together or separate from your tax return. In case you owe less than $10,000, then your request should likely be automatically approved without having to file IRS Form 9465.
 
Unlike an Installment agreement, an offer in compromise is a bit more complex. It involves reaching an agreement with the IRS to pay less than your full balance owed. An offer in compromise is typically only used if you are unable to pay through an installment agreement (IA). For an offer in compromise, you must establish that you cannot pay your balance through an installment agreement or by any other means. You should address the tax liability situation with the IRS as promptly as possible to determine which option suits your case.
 
The 72 month term is the time the IRS allows for you to pay your liability in full.  However, if you are unable to pay this liability in full (including interest on the liability which accrues throughout the time), then you may qualify for a Partial Pay Installment Agreement (PPIA).
 
An installment agreement (IA) can be paid either by check, on the IRS website, or directly via a bank account – this version of an Installment Agreement (IA) is called the Direct Debit Installment Agreement (DDIA).  There are instances when the IRS specifically requests that the taxpayer pay via a Direct Debit Installment Agreement (DDIA).