I owe the IRS. Am I required to submit form 9465?

Question

I owe the IRS about $4,000 and can probably pay this off in about 10 months. They sent me what looks like any other bill you would get from a credit card. I'm I REQUIRED to submit settlement payment fom 9465, or can I just send them X dollars and they will send me another bill next month?

Answer 1

If you *don't* set up the payment plan (pay the $105 fee *and* make sure you actually make the monthly payments), you will get a total of 3-4 bills.  The CP504 is pretty nasty as it threatens to find and take your bank account and/or contact your employer and garnish your wages.

Only if you were planning to pay this off in 3-4 months can you blow off getting a formal payment plan.

Answer 2

If you want a formal installment agreement, you must submit Form 9465 otherwise the account will go into collection before you can pay it off.  After you send in the form, the late payment penalty accrual rate will drop by half.  You can propose smaller payments to give yourself a safety valve in case you were overly optimistic about how fast you could pay your bill.