This is Kim Lawson.  I’m talking with Fred Schindler about the Internal Revenue Service’s Online Payment Agreement application available on IRS.gov.   

David, let’s start off with the definition of an Online Payment Agreement. 

An Online Payment Agreement, or “OPA,” is an application that can be completed online through IRS.gov. It is designed to help those individuals who owe taxes but are unable to pay them on time. With an approved OPA, they can make payments over time.

The program allows taxpayers or their authorized representatives to apply for an installment agreement and receive immediate notification of approval using the Internet.

Of course, it’s in the taxpayer’s best interest to pay their taxes on time to avoid additional penalty and interest assessments. However, if a taxpayer is unable to pay in full, the IRS may grant an installment agreement allowing monthly payments. Again, the fastest and easiest way to obtain an installment agreement is to apply for it at IRS.gov.

That sounds like a great timesaver. Is an online installment agreement available to everyone?

There are qualifications. Individuals who owe $25,000 or less in combined tax, penalties and interest can use the OPA application to request a payment agreement.

Authorized taxpayer representatives with a Power of Attorney can also request a payment agreement for their clients. 

In fact, the application has recently been improved to allow representatives to request agreements for more than one client during the same online session.

Exactly where on IRS.gov can we find the OPA application?  

The application and instructions are usually located on the IRS.gov home page in the “Online Services” box.

Taxpayers can also do a search by typing in Online Payment Agreement in the search field.

What information should a person have when applying for an OPA?

If you received a balance due notice from the IRS, you will need the following information to apply online:

Your Social Security Number or Individual Taxpayer Identification Number.

Your Personal Identification Number or “PIN” for the OPA application. If you have not already established a PIN, you will need an IRS notice that displays your caller identification number in order to do so. If you do not have either, you will need to first call the IRS to obtain one.

You may need additional information about your income and expenses to determine the amount of your monthly installment payment, such as rent or mortgage statements, pay stubs or utility bills. With this information, you can calculate a monthly payment that will fit into your budget.

You will need to select the day of the month you want your monthly payment to be due.

Suppose the taxpayer has not received a balance due notice from the IRS?

You can still use OPA.  If you owe tax but have not received a bill from the IRS, you need to establish a pre-assessed agreement on your current year returns. To do this using the OPA application you  need to have ready your:

• Balance due shown on the return
• Taxpayer identification number (SSN or ITIN)
• Spouse’s taxpayer identification number, if applicable
• Date of birth
• Adjusted Gross Income from last year’s income tax return
• Total tax from last year’s income tax return

What does it cost to use the Online Payment Agreement application?

There is no charge to use the OPA application.

However, all installment agreements, including those granted using OPA, are subject to a user fee, currently $105 for non-direct debit agreements and $52 for direct debit agreements. Certain taxpayers may qualify for a lower user fee based on their income.

What resources are available for someone who wants to learn more?

Additional information is available on the IRS.gov Web site. Search for “Online Payment Agreement” or “Installment Agreement.”  You can also use the pull down tab on the IRS home page, “I Need To” and then select, “Set Up a Payment Plan.”

Thank you, Fred. I’ve been talking with Fred Schindler of the IRS. This is Kim Lawson.