Guaranteed Installment Agreement: When & How To Request

If you have taxes owed, a Guaranteed Installment Agreement is the easiest installment plan to get. In fact, as long as you meet the basic requirements, it’s guaranteed by law.

To qualify, you must be an individual with $10,000 or less in assessed tax, and you must be able to pay off the balance within three years or by the Collection Statute Expiration Date (CSED) if that's sooner.

Your payments can be $25 or even lower, but you should always try to make the largest payments you can. The faster you pay off your taxes, the less interest and penalties you pay.

Requirements for Guaranteed Installment Agreements (GIA)

To qualify for a Guaranteed Installment Agreement, you must meet the following criteria:

1. You owe $10,000 or less (excluding interest and penalties).
2. Your spouse and you (if filing jointly) have filed all your tax returns from the last six years. Furthermore, you paid all your taxes on time.
3. You are not currently on a payment plan for late taxes.
4. Agree to pay the balance within three years or by the CSED if sooner.
5. You are not in bankruptcy.
6. You did not have an installment agreement in the previous five taxable years

Note that although the rule says that you must have filed the last six years of returns, you can get approved if you have filed the last five years and an extension for the current year. If the IRS accepts your request, you must make all the payments on time, or the agreement may terminate. Additionally, the agreement can also be terminated if you file future tax returns late or fail to pay.

How To Request A Guaranteed Installment Agreement

1. You can apply for a guaranteed installment plan online with the IRS’s Online Payment Agreement (OPA).
2. To apply by mail, print out Form 9465 (Installment Agreement Request) and fill it out. Then, mail the application to the address on the form. Make sure to include a copy of your tax return. If you don’t have a printer, you can call 1-800-829-1040 and ask the IRS to mail you Form 9465, or you can have it printed at your local library.
3. Alternatively, you can call the IRS.
4. When applying, note how much you can pay each month. Make sure the payment you suggest is enough to pay off the balance, interest, and penalties within 36 months.
5. If you aren’t sure what payment to suggest, divide your balance by 30. That gives you a cushion to cover the interest and penalties, while also ensuring you pay your balance off quickly.
6. You also have to choose a date for your payment (between the 1st and the 28th) Make that date works with your budget. Remember, that your first payment must be at least 30 days after the date you apply.
7. You must submit a set-up fee with your first payment. At the time of writing, the setup fee is $31 for direct debit agreements done through the OPA and $149 for all other OPA agreements. If you don’t use the OPA, these fees rise to $107 and $225 respectively. If your income is under a certain amount, you may only have to pay a $43 fee, and in some cases, low-income applicants can have their fee waived.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional.