Reinstating an installment agreement is the process of restoring your IRS payment plan after it has been defaulted or terminated due to missed payments, unfiled tax returns, or other compliance issues. To reinstate, you must typically pay a reinstatement fee (currently $89 if paid by direct debit, $130 for other methods), bring all missed payments current, file any delinquent tax returns, and agree to continue making timely monthly payments. The IRS generally allows reinstatement if you can demonstrate the default was due to circumstances beyond your control or you’ve corrected the compliance issues. You must request reinstatement before the IRS issues a Final Notice of Intent to Levy. If reinstatement isn’t approved or feasible, alternative options include negotiating a new installment agreement, requesting Currently Not Collectible status, or submitting an Offer in Compromise.
Missing an IRS installment payment can put your entire plan at risk. Even one missed payment can trigger default, and if you don’t act fast, the IRS can cancel your agreement and demand the full balance. Defaulting on your IRS payment plan can lead to serious tax problems, including additional penalties and interest, and may […]
