An installment agreement is a contract under IRC §6159 to pay a tax liability in monthly installments. In 2026 the product most taxpayers get has a new name and new rules: the Simple Payment Plan. Interim IRS guidance replaced “streamlined” agreements for individuals in March 2025 and extended the model to businesses in January 2026; IRM 5.14.5 (rev. July 21, 2026) codified it. Much of what still ranks for this topic — including explainers teaching a five-year payoff, a 72-month minimum payment, or a mandatory direct debit above $25,000 — describes the retired framework. This page describes the agreement as it exists now.
General information, not tax or legal advice. An installment agreement stops levies while it runs; it does not stop interest or penalties, and it ends if you stop complying with its terms.
Four material changes separate the Simple Payment Plan from the streamlined agreement it replaced (IRM 5.14.5.2):
Setup is by the Online Payment Agreement tool (individuals), phone, Form 9465 by mail, or a Taxpayer Assistance Center. Online approval is immediate when the criteria are met. Setup fees as of October 2026 run $29 (online, direct debit) to $178 (manual, non-direct-debit), with the fee due alongside the first payment — the full schedule is on the fees and interest page.
Businesses qualify under the same model, on three tracks (IRM 5.14.5.2(2), 5.14.5.4): non-trust-fund balances up to $50,000 under the main Simple rules; trust-fund balances (payroll withholding) up to $25,000 under the Simple Payment Plan (Business Trust Fund) — the successor to the old In-Business Trust Fund Express agreement, whose 24-month rule and direct-debit mandate are both deleted; and an out-of-business sole proprietorship with trust-fund balances up to $50,000. Businesses cannot apply online — the routes are phone (800-829-4933), a Taxpayer Assistance Center, or an assigned employee.
Inside the Simple criteria sits a statutory subset. Under IRC §6159(c) and IRM 5.14.5.3, the IRS must grant an agreement when all of these hold: the liability is income tax of $10,000 or less (the cap applies to the tax alone — penalties and interest, assessed or accrued, do not count); no failure to file or pay in the preceding five tax years; no installment agreement in the preceding five tax years; and you agree to full-pay within three years or by the CSED, whichever is earlier, and to stay compliant. No financial statement, no lien determination, no managerial approval. If you miss the Guaranteed criteria, the IRM directs the IRS to consider a Simple Payment Plan next — it is a step down, not a rejection.
Past the Simple threshold, agreements are still available — they just stop being near-automatic. The IRS works a Form 433 financial analysis of income, allowable expenses and assets, makes a lien determination, and requires managerial approval. The payment is set from that analysis, sized to full-pay by the CSED. If the analysis shows your ability to pay cannot retire the balance before the deadline, the agreement becomes a partial payment agreement instead — same machinery, different destination.
The payment method is part of the product: a direct debit agreement (DDIA) carries the lowest fees ($29 online, $107 manual) and the lowest default rate — its mechanics are on the DDIA page. Payroll deduction via Form 2159 costs $178. Manual payments through Direct Pay, EFTPS, check or card avoid bank access but carry the $69/$178 fee tiers and the highest missed-payment risk; card payments add processor fees on top.
Not sure a monthly agreement is the right rung? The payment plans hub routes every balance; how small a payment the IRS will accept is worked on the minimum payment page.
What is an installment agreement? A formal agreement under IRC §6159 to pay a tax liability in monthly installments instead of at once. In current IRS usage “installment agreement” and “payment plan” are the same thing; the standard product for assessed balances up to $50,000 is the Simple Payment Plan described on this page.
How long do you have to pay off an IRS installment agreement? There is no 72-month minimum-payment rule since the July 2026 IRM revision: under a Simple Payment Plan your payment must full-pay the balance, including accruals, by the Collection Statute Expiration Date, so terms can approach ten years. A Guaranteed agreement is shorter by statute — full pay within three years or by the CSED, whichever is earlier.
What happens when I request a payment plan? If you apply online and meet the criteria, you get an immediate approval or denial notification. By mail on Form 9465, the IRS usually responds within about 30 days with a notice stating the agreement terms and the setup fee. While the request is pending, the IRS is generally barred from levying and the collection clock is suspended.
How do I manage my plan to avoid default? Pay on time every month, file every return and pay every new tax bill in full — a new balance is the most common default trigger — and act before a payment you cannot make comes due, by changing the amount or due date through the online tool or by phone. The full default procedure, the CP523 notice and reinstatement are covered on the default page.
General information, not tax or legal advice. Sources: IRM 5.14.1 and 5.14.5 (rev. July 2026); IRC §§6159, 6331(k), 6651(h); Interim Guidance SBSE-05-0325-0008 and SBSE-05-0126-0008; IRS, “Payment plans” and “Simple Payment Plans” pages. Currency verified 2026-10-23.