Short answer
The Simple Payment Plan is the IRS’s new name for the streamlined installment agreement. If you owe $50,000 (IRS.gov, July 2026) or less in assessed tax, penalties and interest and have filed all your returns, you can pay by the CSED (IRS.gov, July 2026) (up to 10 years (IRS.gov, July 2026)). No financial statement or lien determination is needed (IRM 5.14.5, 21 July 2026).
Key takeaways
- The IRS says more than 90% (IRS.gov, 2026) of individual taxpayers qualify for a Simple Payment Plan.
- The 72-month payoff rule from the 2012 Fresh Start expansion is gone. The balance now has to be paid by the Collection Statute Expiration Date (CSED).
- Direct debit is optional at every balance up to the limit, but it still has the lowest setup fee ($29 (IRS.gov, 2026) online).
- Businesses now qualify too: up to $50,000 (IRS.gov, July 2026) without trust fund taxes and $25,000 (IRS.gov, July 2026) with them.
- No lien determination is required, but a revenue officer can still file a lien. A Simple Payment Plan is not a promise of no lien.
What changed from the streamlined installment agreement
The IRS began using the Simple Payment Plan name in interim guidance issued 3 March 2025. The revised Internal Revenue Manual section, IRM 5.14.5 (Manual Transmittal 21 July 2026), made it official and changed the rules. The main differences:
| Rule | Streamlined installment agreement (before) | Simple Payment Plan (2026) | Source |
|---|---|---|---|
| Payoff deadline | 72 months, a term set in the 2012 Fresh Start expansion (IR-2012-31) | Paid in full by the CSED, up to 10 years | IRM 5.14.5.2 |
| Direct debit | Direct debit or payroll deduction required for individual balances from $25,001 up to the limit | Not required for any balance up to $50,000 | IRM 5.14.5.2 |
| Balance tiers | Two tiers with different rules | One tier | IRM 5.14.5 material changes |
| Businesses without trust fund taxes | Not covered by this IRM section | Up to $50,000, paid by the CSED | IRM 5.14.5.2 |
| Businesses with trust fund taxes | “In-Business Trust Fund Express”: 24-month payoff, direct debit required from $10,001 | Up to $25,000, paid by the CSED, direct debit optional | IRM 5.14.5.4 |
| Earlier defaults | Not addressed in this section | The IRS checks whether the request is “solely to delay” collection | IRM 5.14.5.2 |
Some things did not change. You still need no Collection Information Statement, and the individual dollar limit is the one set in 2012, when IR-2012-31 doubled it. IRM 5.14.5 now also states that no manager’s approval is needed.
Who qualifies for a Simple Payment Plan
| Taxpayer | Balance limit (assessed tax, penalties and interest) | Where to apply |
|---|---|---|
| Individuals, including sole proprietors and independent contractors | $50,000 | Online, by phone, by mail or in person |
| Businesses without trust fund taxes | $50,000 | Phone or in person |
| Businesses with trust fund taxes (unpaid withheld payroll taxes) | $25,000 | Phone or in person |
| Out-of-business sole proprietorships with trust fund taxes | $50,000 (IRS.gov, 2026) | Phone or in person |
You also need to meet these conditions:
- Filed and current. All required returns must be filed. Individuals must be up to date on withholding or estimated tax payments. Businesses must be current on federal tax deposits.
- The limit counts the assessed balance. The IRS counts tax, assessed penalties and assessed interest. Interest and penalties that have built up but haven’t been assessed yet don’t count. A balance from a return the IRS hasn’t billed yet does count toward the limit.
- Not solely to delay. If you defaulted on earlier agreements, the IRS looks at whether the new request is only meant to stall collection.
You can be in any collection status: notice status, balance due, or not yet assessed. Under IRM 5.14.5.2 the IRS may grant a Simple Payment Plan even if you could pay in full. If you are in an open bankruptcy case, you generally can’t get a payment plan, per IRS Tax Topic 202. IRM 5.14.5 is written for IRS field staff, and the Simple Payment Plan page on IRS.gov gives the same limits for everyone else.
Owe a little more than the limit? Pay it down first
The IRS manual tells revenue officers to encourage people just above the limit to pay the balance down. You then avoid a financial statement, get up to 10 years (or until the CSED, if sooner) to pay, and may qualify for a Simple Payment Plan.
Example (assumed figures): your assessed balance is $53,400. You pay $3,500 through IRS Direct Pay, and your balance falls to $49,900. Once that payment has posted, you apply for a Simple Payment Plan instead of filing Form 433-F and having your finances reviewed.
Businesses with trust fund taxes can also pay down, but IRM 5.14.5.4 says the first installment of the plan can’t be the payment that gets the balance under the limit. Pay it before the plan is granted. If you can’t pay down, see the other IRS payment plan options, including non-simple and partial payment agreements.
Liens: no lien determination is not the same as no lien
For a Simple Payment Plan, the IRS does not have to decide whether to file a Notice of Federal Tax Lien. But IRM 5.14.5.2 lets a revenue officer file one “when they determine filing is appropriate to protect the government’s interest.” The officer must write down why and get a manager to agree. A lien filed before your plan also stays in place.
The limits for lien withdrawal are stricter than the Simple Payment Plan limits. To get a filed lien withdrawn through a direct debit plan, you must owe $25,000 (IRS.gov, 2026) or less. The plan must pay in full within 60 months (IRS.gov, 2026) or before the CSED, whichever is earlier, and you must have made 3 (IRS.gov, 2026) consecutive direct debit payments. See tax lien relief and Form 12277.
If a lien matters to you, for example because you are refinancing, pick direct debit and a term that pays off within the withdrawal limit. Then you can ask for withdrawal after the third payment.
How to apply for a Simple Payment Plan
- Confirm your balance. Check the assessed balance in your IRS Online Account or on your latest notice. If it is over the limit, decide whether to pay it down first.
- File anything missing. Unfiled returns block the plan. Bring your withholding or estimated payments for this year up to date.
- Apply. Individuals use the Online Payment Agreement tool and get an immediate decision. You can also call 800-829-1040 (IRS.gov, 2026), mail Form 9465, or visit a Taxpayer Assistance Center. Businesses call 800-829-4933 (IRS.gov, 2026) or the number on the notice. If a revenue officer or private collection agency already has your case, ask them.
- Choose how to pay. Pick direct debit for the lowest fee, or pay each month through Direct Pay, your online account, card or check. With a revenue officer, direct debit uses Form 433-D and payroll deduction uses Form 2159.
- Stay compliant. Pay every month, and file and pay future taxes on time. A new unpaid balance can put the plan in default.
Simple Payment Plan fees and ongoing costs (2026)
| How you pay | Apply online | Apply by phone, mail or in person | Low income |
|---|---|---|---|
| Direct debit | $29 | $107 (IRS.gov, 2026) | Fee waived (IRS.gov, 2026) |
| Other payment methods | $69 (IRS.gov, 2026) | $178 (IRS.gov, 2026) | $43 (IRS.gov, 2026), may be reimbursed |
Low income means adjusted gross income at or below 250% (IRS.gov, 2026) of the federal poverty level. Interest continues at the federal short-term rate plus 3 percentage points, reset quarterly (7% (IRS.gov, Jul-Dec 2026) for July to December 2026). If you filed on time, the failure-to-pay penalty drops to 0.25% (IRS.gov, 2026) a month while the plan is in effect. Fees were last updated by the IRS on 3 March 2026. Older sources, including the Form 9465 instructions (Rev. July 2024), still print outdated fees.
How the monthly payment is worked out
There is no longer a “divide by 72” rule. The IRS uses its own calculator to check that your payment will pay the full balance, including interest and penalties that keep building up, before the CSED. Your payment can go up or down later, as long as the balance is still paid by then. Online, the tool prompts you to raise a monthly amount that is too low.
Example (assumed figures): you owe $30,000 and your CSED is eight years (96 months) away. Leaving out interest, $30,000 ÷ 96 = $312.50 a month. With interest, the payment is about $409 a month and total interest is about $9,300. This assumes the current rate of 7% stays the same, compounds monthly for simplicity, and ignores the penalty. Paying over 48 months instead costs about $718 a month but only about $4,500 in interest. The IRS’s own figures will differ slightly because it compounds interest daily and adds the failure-to-pay penalty.
The IRS page puts it plainly: “the longer the payment plan term you choose, the more interest and penalties you will owe.” Model your own numbers with the payment plan calculator.
Frequently asked questions
It replaces it. The IRS renamed the streamlined installment agreement the Simple Payment Plan and, in IRM 5.14.5 (21 July 2026), changed the rules. The payoff deadline is now the CSED rather than 72 months. Direct debit is no longer required, and businesses can qualify.
$50,000 for individuals, counting assessed tax, penalties and interest. Businesses can owe up to $50,000 without trust fund taxes, or $25,000 if trust fund taxes are included. Out-of-business sole proprietorships with trust fund taxes can owe up to $50,000.
Until the Collection Statute Expiration Date, which is generally 10 years (IRS.gov, 2026) after the tax was assessed. The IRS says most taxpayers have up to 10 years to pay. If your tax was assessed years ago, your remaining time is shorter.
No. The 72-month payoff rule, which dates from the 2012 Fresh Start expansion, was removed from IRM 5.14.5 in July 2026. Pages that tell you to divide your balance by 72 are out of date.
No. Direct debit is optional at every balance up to the limit. It is still worth considering: the setup fee is lower ($29 online versus $69), automatic payments are less likely to default, and only direct debit plans qualify for the special lien withdrawal route after 3 payments.
Yes. The IRS doesn’t have to decide whether to file a lien, but a revenue officer may still file one to protect the government’s interest, with written justification and a manager’s agreement. A lien that was filed earlier stays until it is released or withdrawn.
Yes, since the 2026 changes. Businesses must apply by phone (800-829-4933) or in person, not online. They must be current on filing and federal tax deposits. The trust fund version is not available if the request comes with a request to release a levy, according to IRM 5.14.5.4.
Sources
- IRS: Simple payment plans for individuals and businesses (reviewed 27 Jun 2026)
- IRM 5.14.5, Simple Payment Plans, Guaranteed Installment Agreements, and Simple Payment Plans (Business Trust Fund) (21 Jul 2026)
- IRS: Payment plans; installment agreements (fees updated 3 Mar 2026)
- IRS: Online Payment Agreement application
- IRS Tax Topic 202, Tax payment options
- IRS: Understanding a federal tax lien (DDIA withdrawal criteria)
- IRS: Failure to pay penalty
- IRS: Quarterly interest rates
- IRS News Release IR-2012-31 (7 Mar 2012): Expanded Fresh Start Initiative
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