What to do when you owe the IRS, and when a payment plan needs a CPA

If you filed and still owe the IRS, or a notice shows a balance you cannot pay at once, you can ask for a payment plan. A CPA is not required to make that request. Individuals who meet the dollar limits and have filed required returns can apply online and get an immediate answer. A CPA, enrolled agent, or attorney is who the IRS authorizes to represent you when the balance is a collection matter.

This is educational information about how to hire, not tax advice. It does not tell you what to file, what you owe, or how to answer the IRS. Reading it does not create a client relationship with CPA Seek or with any CPA in the directory.

Can you set up a plan without a CPA?

Yes, when you are an individual and the balance fits the online rules. The IRS payment plans page says you may qualify to apply online for a long-term plan if you owe $50,000 or less in combined tax, penalties, and interest and you have filed all required returns. A short-term plan, paid in 180 days or less, is available online to an individual who owes less than $100,000 in combined tax, penalties, and interest. That page says only individual taxpayers can apply for a short-term plan online. A sole proprietor or independent contractor applies as an individual.

Business accounts cannot apply online. The IRS tells a business to call the number on the notice or 800-829-4933. An individual who cannot use the online application can file Form 9465, Installment Agreement Request, or call 800-829-1040 or the number on the bill. If the instructions require it, Form 433-F, Collection Information Statement, goes with Form 9465.

The online payment agreement page says a qualified individual, or an authorized representative who already has a power of attorney, receives immediate notice of whether the plan was approved. You create an IRS online account, which takes a photo ID. Direct debit needs the bank routing number and the account number. If you filed recently and the bill has not arrived, use the balance due shown on the return.

Short-term, monthly, and the other outcomes

A payment plan is an agreement to pay inside a longer window. The IRS says to request one when you expect to pay the full amount inside that window.

A short-term plan is 180 days or less. The setup fee is $0 online and $0 by phone, mail, or in person. Penalties and interest continue until the balance is paid.

A long-term plan is a series of monthly payments. Topic 202 calls the usual version a Simple Payment Plan. For most individuals, the IRS says you are generally eligible when the assessed total of tax, penalties, and interest is $50,000 or less and the payments will finish the balance by the collection statute expiration date, generally 10 years from the date the tax was assessed. Topic 202 says the IRS considers the request only after you are current on filing and payment requirements. Someone in an open bankruptcy proceeding is generally not eligible.

A guaranteed installment agreement is a smaller box. Topic 202 says an individual can qualify when the tax owed is $10,000 or less, not counting interest and penalties, and all of these are true. During the past five years you, and your spouse if the return was joint, timely filed all income tax returns and paid any income tax due. During those five years you did not already have an installment agreement for income tax. You agree to pay the full amount within three years and to follow the tax laws while the agreement is in effect. You are financially unable to pay the liability in full when it is due.

If you miss those plans, Topic 202 says you may still qualify. A Notice of Federal Tax Lien determination and a collection information statement, Form 433-F, Form 433-A, or Form 433-B, may be required.

A partial-payment installment agreement is the request that will not finish the balance before the collection statute expires. Topic 202 says the IRS then requires the financial statement and supporting records, decides whether to file a public lien notice, and reviews the agreement every two years. The review can raise, lower, or leave the monthly amount.

Currently not collectible is a delay, not a discount. Topic 202 says you can ask the IRS to hold collection when paying would keep you from meeting basic living expenses. The debt stays. Interest and penalties continue. The IRS can still file a lien, and it reviews your finances later.

An offer in compromise is a request to settle for less than the full amount. Topic 202 says the IRS will not consider an offer until you have filed all tax returns, received a bill for at least one debt included on the offer, and made all required estimated tax payments for the current year. A business with employees must also be current on federal tax deposits for the current quarter and the two quarters before it. An open bankruptcy makes you ineligible. The IRS pre-qualifier confirms the current forms. Using the tool does not mean the offer will be accepted.

What the setup fee is, and what keeps growing

The payment-plan page lists the setup fees. It was updated March 3, 2026. Paying the full balance today has a $0 setup fee. A short-term plan has a $0 setup fee. A long-term direct-debit agreement, paid by automatic withdrawal from a checking account, costs $29 to set up online and $107 by phone, mail, or in person. A long-term plan that is not direct debit costs $69 online and $178 by phone, mail, or in person. Card payments add a processor fee on top of those amounts.

Low-income individuals are people whose adjusted gross income, for the most recent year the IRS has, is at or below 250 percent of the applicable federal poverty level. For a long-term plan entered on or after April 10, 2018, the direct-debit setup fee is waived. If you cannot use direct debit, the fee is $43 and may be reimbursed when the agreement is completed. If you believe you qualify and the IRS did not mark the account that way, Form 13844 has to reach the IRS within 30 days of the acceptance letter.

Changing an existing plan online costs $6. Changing it by phone, mail, or in person costs $89. The same page says a change to an existing direct-debit agreement has a $0 fee. Putting a defaulted plan back in place can add a reinstatement fee.

Interest and some penalties continue until the balance is paid in full. Approving the plan does not freeze the bill.

The failure-to-file penalty is a different charge from the setup fee. The IRS failure-to-file penalty page says the penalty is 5 percent of the tax due, after on-time payments and available credits, for each month or part of a month the return is late, up to 25 percent. When the return is more than 60 days late, the minimum for a Form 1040 or Form 1120 whose due date, without an extension, is after December 31, 2025 is $525 or 100 percent of the underpayment, whichever is less. If the failure-to-pay penalty also applies, the failure-to-file penalty is reduced by the failure-to-pay amount, which that page states as 0.5 percent for each month. After five months the failure-to-file penalty stops growing and the failure-to-pay penalty can continue. The IRS says to file even when you cannot pay the balance.

An extension does not change that payment date. The IRS extension page says you have until October 15 to file, and that you pay any tax you owe by the April filing date. The extension covers the return. It does not cover the balance.

What collection does while the request is open

The payment-plan page says that, with certain exceptions, the IRS is generally prohibited from levying while an installment-agreement request is pending, and that the time the IRS has to collect is suspended or prolonged while the request is pending. A rejection suspends the collection period for 30 days. A proposed termination after a default does the same. An appeal of a rejection or termination suspends the collection period while the appeal is pending.

That page also says the IRS generally will not take enforced collection while a plan is being considered, while a plan is in effect, for 30 days after a rejection or termination, or while an appeal of that decision is under review.

Topic 202 separates the statute from the levy. The collection period is not suspended while the installment agreement is in effect. Waiting for an answer and living under an approved plan are different clocks. Read both pages before you assume a plan pauses the ten-year collection period.

Future refunds go against the debt until it is paid. You still send the scheduled payment in a month when a refund is applied. To avoid default, pay at least the minimum on the date you chose, file required returns on time, and pay new taxes on time. If you move, the payment-plan page points to Form 8822.

When a CPA, enrolled agent, or attorney is the right hire

The IRS page on preparer credentials is the line. Enrolled agents, certified public accountants, and attorneys have unlimited representation rights. Those rights cover audits, payment and collection issues, and appeals. A preparer with limited representation rights, including someone who completed the Annual Filing Season Program, may represent a client only on a return they prepared and signed, and only before revenue agents, customer service representatives, and similar IRS employees. They cannot represent the client on appeals or on collection, even when they prepared the return. Someone who has a preparer tax identification number and none of those credentials, and who is not in the Annual Filing Season Program, may prepare a return and has no representation authority.

Use that line when you decide. A short-term plan or a simple plan that you qualify to request in your own online account does not require a representative. Hire a CPA, enrolled agent, or attorney when someone must talk to the IRS about the balance. The usual reasons are a balance above the online limits, returns that are still unfiled, a business account, trust-fund employment taxes, a dispute about the amount on the notice, or a request that needs a collection information statement.

Topic 202 sets tighter simple-plan limits for businesses. With trust-fund taxes, the assessed total is generally $25,000 or less, or $50,000 or less for an out-of-business sole proprietorship. Without trust-fund taxes, the assessed total is generally $50,000 or less. The payments still have to finish the assessed balance by the collection statute expiration date. A business sends that request by phone or by mail. It does not go through the individual online application.

If a representative applies online, the online payment agreement page says they use a Tax Pro Account, or they apply offline. Form 2848, Power of Attorney and Declaration of Representative, has to authorize every period that has a balance due. Not every designation on that form can request a payment plan. The page says designation level h cannot. Written changes on line 5a or 5b, or the checkbox for access through an intermediate service provider, also block an online plan in Tax Pro Account. The representative then applies offline.

Ask which product they are requesting: a short-term plan, a guaranteed agreement, a simple plan, a partial-payment agreement, currently not collectible status, or an offer in compromise. Ask whether their name will be the name on Form 2848. A useful answer names the form and a limit. A promise that the balance will be erased is not a plan.

What to bring if you hire

Bring every page of the notice and the return for each year it names. Bring proof of payments already made, including confirmation numbers. If returns are missing, bring the records needed to file them. A long-term online plan requires those returns to be filed. If the question is whether you can pay basic living expenses, Topic 202 says the IRS may ask for a collection information statement and proof of income, expenses, and assets.

Do not send Social Security numbers and full returns through a short form on a directory. Hire the person, then use the method they give you.

A balance on a return you already filed is a different bill from the next estimated-tax payment. Year-end questions before December 31 is the note for that January date. This note is the assessment you have now. What to bring when the IRS sends a notice is the folder for the letter. An exam is a different engagement, covered in CPA or enrolled agent for an IRS audit.

Where to look for that person

Filter for IRS representation, or search that service. A city can have published preparer records and still have nobody who has tagged collection work. That is true in Lake Havasu City, El Centro, and Yuma. The state lists are Arizona and California. Read the services on the profile before you send the notice.

How a CPA, an enrolled agent, and a tax preparer differ is the credential comparison. How to check a CPA or preparer before you hire is the state license and the preparer tax identification number. How much a CPA costs for taxes is how to compare a fee. The IRS does not publish a price for representation.