Eligible individuals and small businesses can make payment arrangements with the IRS using an online application at IRS.gov, according to the Internal Revenue Service. Those not eligible for an online payment agreement can apply for an installment agreement by phone or mail.
To apply for an online payment agreement, go to the IRS.gov main page, select Payments in the toolbar at the top of the page, and click on Online Payment Agreement in the first bullet point under Can't Pay Now, explains the IRS. Individuals qualify if they filed all relevant tax returns and their combined debt of taxes, interest and penalties is less than $50,000 as of 2015. Taxpayers must enter their names, Social Security or tax ID numbers, email and physical addresses, birth dates and filing status. Businesses qualify if they filed their tax returns and their total debt is $25,000 or less. Businesses must enter their Employer Identification Number and date of issue, the address from their most recent tax return and the caller ID from their payment notice.
When individuals or businesses apply for online payment agreements, they agree to make minimum monthly payments, file tax returns and make tax payments on time, states the IRS. They also agree to allow the IRS to apply their tax refunds to the debt until they finish paying it and to notify the IRS of any change of address. If taxpayers default on a payment agreement, they must pay a reinstatement fee, interest and penalties.