Form 433-D: Installment Agreement
If you're facing difficulty paying your taxes in full, the Internal Revenue Service (IRS) offers an option to spread your tax debt over time through an installment agreement. Form 433-D, also known as the "Installment Agreement Request," is the official document used to initiate this process with the IRS.
What is Form 433-D and its Purpose?
Form 433-D is a one-page document that formally requests a direct debit installment agreement with the IRS. A direct debit agreement allows the IRS to automatically withdraw your agreed-upon monthly payment from your checking account, simplifying the payment process for both parties.
By submitting Form 433-D, you propose a payment plan that outlines the total amount owed, the desired monthly payment amount, and the proposed duration of the agreement.
Who Should Use Form 433-D?
This form is ideal for taxpayers who:
- Cannot afford to pay their entire tax debt at once.
- Want a structured approach to settle their tax obligations.
- Have already explored other payment options, such as an extension to file, and require a longer-term solution.
What are the fees associated with Form 433-D?
The IRS charges a user fee for processing installment agreements. However, the fee is reduced for low-income taxpayers and can be waived entirely if you choose the direct debit option.
What happens if I miss a payment under the installment agreement?
Missing a payment can lead to penalties and the potential termination of your agreement. If you anticipate missing a payment, contact the IRS immediately to discuss your options.
How long can my installment agreement last?
The maximum installment period typically ranges from 12 to 72 months, depending on the amount of your tax debt and your proposed monthly payment.
What happens when I complete my installment agreement?
Once you've fulfilled all your payment obligations under the agreement, the IRS will send you a notification confirming that your tax debt has been settled.
What are the eligibility requirements to use Form 433-D?
There are no strict eligibility requirements for using Form 433-D. However, the IRS will assess your financial situation and proposed payment plan to determine if a direct debit installment agreement is the most suitable option for resolving your tax debt.