The thresholds the IRS publishes
These are the criteria in IRM 5.14.5 (revised July 21, 2026) and on the IRS payment plans page (last updated August 13, 2026) and online payment agreement page (last updated September 14, 2026), as saved on October 25, 2026.
| Option | Who and how much | Term | Source |
|---|---|---|---|
| Guaranteed agreement | Individuals; income tax of $10,000 or less, excluding penalties and interest; no failure to file or pay and no agreement in the prior 5 years | 3 years or the CSED, whichever is earlier | IRC 6159(c); IRM 5.14.5.3 |
| Simple Payment Plan | Individuals, out-of-business sole proprietors and business non-trust fund taxes; assessed balance $50,000 or less | Up to 10 years or the CSED, whichever is earlier | IRM 5.14.5.2 |
| Simple Payment Plan (Business Trust Fund) | In-business trust fund taxes; assessed balance $25,000 or less | By the CSED | IRM 5.14.5.4 |
| Short-term plan | Less than $100,000 in combined tax, penalties and interest | 180 days or less | IRS payment plans page |
| Online long-term plan | Individuals owing $50,000 or less who filed all required returns; businesses cannot apply online | Monthly | Online payment agreement page |
The Simple Payment Plan replaced the streamlined agreement for balances of $50,000 or less; IRM 5.14.5 removed the old two-tier $25,000 structure and the 72-month rule and now requires the IRS's calculator to show full payment by the CSED. “A Collection Information Statement (CIS) is not required when the account meets the criteria for a Simple Payment Plan,” and “Managerial approval is not required to grant a Simple Payment Plan.” The balance tested is the unpaid balance of assessment, which includes assessed penalties and interest but not accruals, and a taxpayer can pay it down before the agreement to get under the limit. Above these levels the IRS works from a collection information statement; the payment plans page points taxpayers who cannot meet the minimum payment to Form 433-F, 433-H or 433-B. See Simple Payment Plans, installment agreements and partial payment agreements.
Setup fees (IRS payment plans page)
| Plan | Online | Phone, mail or in person | Low income |
|---|---|---|---|
| Short-term (180 days or less) | $0 | $0 | $0 |
| Long-term, direct debit | $29 | $107 | Waived |
| Long-term, other payment | $69 | $178 | $43, may be reimbursed |
| Revise an existing plan | $6 | $89 | $6 or $43, may be reimbursed |
How the payment estimate works
The estimate finds the level monthly payment that clears the balance in the months chosen, capped at 36 months for a guaranteed agreement, 120 months for a Simple Payment Plan, and the months left before the CSED if you enter it. Each month it adds interest at the current quarter's underpayment rate (7% for the fourth quarter of 2026), compounded daily under IRC 6622, and, if you enter the unpaid tax, the failure-to-pay penalty at 0.25% a month for an individual who filed on time (IRC 6651(h)) or 0.5% otherwise, until the 25% cap. The IRS's own figure comes from its payment calculator, so treat this as a planning number. Requests go in online, by phone, or on Form 9465; a pending request bars levy and suspends the collection statute (IRC 6331(k)(2); IRM 5.1.19.3.5). For penalty amounts on the balance, use the penalty and interest calculator.
Questions practitioners ask
Do I need a financial statement for a balance under $50,000?
Not for a Simple Payment Plan. IRM 5.14.5.2 says a collection information statement is not required when the account meets the Simple Payment Plan criteria, and manager approval is not required either.
Does the $50,000 limit include penalties and interest?
It includes tax, assessed penalties and assessed interest on all modules (the unpaid balance of assessment). It does not include accrued penalties and interest that have not yet been assessed. For the guaranteed agreement, the $10,000 test counts income tax only.
Can a business set up a payment plan online?
No. The online payment agreement page says business accounts cannot apply online; they call the number on the notice or 800-829-4933. Sole proprietors and independent contractors apply as individuals.
Does an installment agreement stop penalties and interest?
No. Interest continues at the quarterly rate, and the failure-to-pay penalty continues, though for an individual who filed on time it drops to 0.25% a month while the agreement is in effect (IRC 6651(h)).