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Installment Plan with IRS?
I setup an installment plan with the IRS and I sent $50 with my taxes, which they deducted from my bank account. I have two questions, I submitted my taxes on 4/16 and haven't received an acceptance letter also I know there is a fee for making payments. Will this fee be added onto the total or will it be deducted with my first payment? What I mean is, I chose to make $250 payments and the fees for bank deduction is $52 will my first payment be $250 or $302?
Thanks ever so much!
4 Answers
- MarineMomLv 61 decade agoFavorite Answer
One year when we had an installment plan, what happened with us was that we got an acceptance letter from the IRS and it stated that our first payment had to be at least $43 to cover the user fee, even though the remaining payments may be smaller. In other words, our monthly payments were only going to be $25 a month that they agreed to, but our first payment had to be at least the amount of the user fee for doing an installment agreement plan.
So, I believe that you will only have to pay the $250 on your first payment since you already sent in the amount to cover the user fee. Even if you had not sent in the $50, your payment of $250 is over the amount of the user fee anyway. I just read our IRS letter to verify this info and that is what our notice said---so I'm sure the same would apply to you!
Edit: Why do people answer this question and thumbs down me like I am wrong? I HAVE DONE A PAYMENT ARRANGEMENT AND WHAT I SAID IS TRUE!
- Anonymous1 decade ago
According to the Form 9465 instructions (linked below), the fee is billed with the first payment. That sounds to me like it will indeed be included in the first electronic funds withdrawal, making the first withdrawal at $302 instead of $250.
Source(s): http://www.irs.gov/pub/irs-pdf/f9465.pdf - 1 decade ago
The IRS will add the fee to your first installment payment. You must also keep in mind that also charge interest, compounding daily. I believe the current rate is 8%.
- Bostonian In MOLv 71 decade ago
On top of the fee for the plan the IRS will add interest, compounded daily, to your balance. The current rate is 8% PA and can be adjusted quarterly.
