How to read these tables
Every amount on this page was read from IRS.gov on October 1, 2026, and the IRS page it comes from is named in the last column and linked in the source list. Where a figure is set for one year, or changes each quarter, the table says so.
These numbers are thresholds, not outcomes. Being under a limit means you can ask without a financial statement. It does not mean the option is the right one. The main Fresh Start guide explains how the options fit together, and the glossary defines the terms.
Many websites still quote the rules as they stood before 2026, including a six-year payment limit and older setup fees. If a figure you have read elsewhere differs from the one here, check the IRS page named in the Source column.
Payment plan limits
Above these limits, or when you cannot afford the payment that clears the balance within the collection period, the IRS generally requires a collection information statement. The pages on the Simple Payment Plan and on payment plan types and fees explain each kind.
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| Short-term payment plan | Less than $100,000 in combined tax, penalties and interest, paid in 180 days or less | Individuals can apply online; others by phone, mail or in person | IRS payment plans page |
| Simple Payment Plan, individuals | $50,000 or less in assessed tax, penalties and interest | Individuals, including sole proprietors and independent contractors | IRS Simple Payment Plans page |
| Simple Payment Plan, business without trust fund taxes | $50,000 or less | Businesses that owe no payroll or other trust fund taxes | IRS Simple Payment Plans page |
| Simple Payment Plan, business with trust fund taxes | $25,000 or less; $50,000 or less for an out-of-business sole proprietorship | Businesses that owe payroll or other trust fund taxes | IRS Simple Payment Plans page |
| Time to pay a Simple Payment Plan | By the collection statute expiration date; the IRS says most taxpayers have up to 10 years | All Simple Payment Plans | IRM 5.14.5; IRS Simple Payment Plans page |
| Guaranteed installment agreement | Income tax of $10,000 or less, not counting penalties and interest, paid within 3 years | Individuals who filed and paid for the preceding five tax years | IRM 5.14.5.3 |
| Online application | $50,000 or less for a long-term plan; less than $100,000 for a short-term plan | Individuals only. Businesses call 800-829-4933 | IRS online payment agreement page |
Payment plan setup fees
Card payments also carry a processing fee that goes to the card processor, not the IRS. If the IRS did not identify you as low-income and you believe you qualify, Form 13844 asks it to reconsider within 30 days of the acceptance letter.
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| Short-term plan | $0 | Plans of 180 days or less, however you apply | IRS payment plans page |
| Long-term plan, direct debit, online | $29 | Automatic monthly withdrawals from a checking account | IRS payment plans page |
| Long-term plan, direct debit, phone, mail or in person | $107 | Same payment method, applied for offline | IRS payment plans page |
| Long-term plan, other payment methods, online | $69 | Paying each month by Direct Pay, EFTPS, check, money order or card | IRS payment plans page |
| Long-term plan, other payment methods, phone, mail or in person | $178 | Same payment methods, applied for offline | IRS payment plans page |
| Low-income, direct debit | Waived | Adjusted gross income at or below 250% of the federal poverty level | IRS payment plans page |
| Low-income, other payment methods | $43, which may be reimbursed | Same income test | IRS payment plans page |
| Revising an existing plan | $6 online; $89 by phone, mail or in person; $43 for low-income taxpayers offline; $0 for changes to a direct debit agreement | Plans already in place | IRS payment plans page |
Tax lien thresholds
The filing guideline and the withdrawal limit are different numbers that do different jobs, and they are often confused. The page on Fresh Start lien withdrawal keeps them apart.
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| General lien filing guideline | $10,000 or more in total unpaid assessed balance | An internal guideline. The IRS may file below it to protect the government's interest | IRM 5.12.2 |
| Lien release after full payment | Within 30 days | Balances paid in full | IRS Understanding a federal tax lien |
| Withdrawal under a direct debit agreement: balance | $25,000 or less; you may pay down to $25,000 first | Individuals, businesses with income tax only, and out-of-business entities | IRS Understanding a federal tax lien |
| Withdrawal under a direct debit agreement: term | Paid in full within 60 months or before the collection period ends, whichever is earlier | Same | IRS Understanding a federal tax lien |
| Withdrawal under a direct debit agreement: payments | Three consecutive direct debit payments, with no default on this or any earlier direct debit agreement | Same | IRS Understanding a federal tax lien |
| Withdrawal after release: compliance | Three years of filed returns, and current estimated payments and deposits | Taxpayers whose lien has been released | IRS Understanding a federal tax lien |
Offer in compromise figures
The page on Fresh Start offer in compromise rules explains how these figures combine into a minimum offer.
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| Application fee | $205, non-refundable | Each Form 656, unless you meet the low-income certification | IRS offer in compromise page; Form 656-B |
| Lump sum offer: initial payment | 20% of the offer amount with the application | Offers paid in 5 or fewer payments within 5 or fewer months of acceptance | Form 656-B |
| Periodic payment offer | First payment with the application, then monthly while under review; balance within 6 to 24 months | Offers paid over 6 to 24 months | Form 656-B |
| Future income multiplier | Remaining monthly income times 12 (lump sum) or times 24 (periodic) | The minimum offer calculation on Form 433-A (OIC) | Form 656-B |
| Deemed acceptance | Two years from IRS receipt with no determination | Does not count any appeal period | IRS offer in compromise page |
| Compliance after acceptance | Five years of timely filing and payment | All accepted offers | Form 656-B |
| Appeal of a rejection | Within 30 days, on Form 13711 | Rejected offers | IRS offer in compromise page |
| Offers in fiscal year 2025 | 38,797 received; 5,464 accepted | All taxpayers. These are counts, not an acceptance rate | IRS Data Book 2025, Table 4-1 |
Penalty and interest rates
For how these charges build up month by month, see penalties and interest on back taxes.
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| Failure-to-pay penalty | 0.5% of the unpaid tax per month or part of a month, up to 25% | Tax not paid by the due date | IRS failure to pay penalty page |
| Failure-to-pay penalty during a payment plan | 0.25% per month | Individuals who filed the return by its due date and have an approved plan | IRS failure to pay penalty page |
| Failure-to-pay penalty after a levy notice | 1% per month | Tax not paid within 10 days of a notice of intent to levy | IRS failure to pay penalty page |
| Failure-to-file penalty | 5% of the unpaid tax per month or part of a month, up to 25% | Returns filed late | IRS failure to file penalty page |
| Both penalties in the same month | 4.5% failure to file plus 0.5% failure to pay | Months in which both apply | IRS failure to file penalty page |
| Minimum penalty for a return over 60 days late | $525, or 100% of the tax due if less | Forms 1040 and 1120 due after December 31, 2025 | IRS failure to file penalty page |
| Interest on underpayments | Federal short-term rate plus 3 percentage points, compounded daily; 7% for the fourth quarter of 2026 | All unpaid tax and penalties. Set each quarter | IRS quarterly interest rates page |
| Automatic Exemption from Penalty | Three prior years (or 12 quarters) of timely filing and payment | 2025 tax year returns and 2026 quarterly returns, and later | IRS administrative penalty relief page |
Collection limits
| Figure | Amount | Applies to | Source |
|---|---|---|---|
| Collection period | Generally 10 years from the date of assessment | Each assessment separately. Certain events pause or extend it | IRS Time IRS can collect tax |
| Passport certification threshold | More than $66,000 for 2026, including assessed penalties and interest | Adjusted each year for inflation. Not applied to balances in an approved installment agreement or in hardship status | IRS passport page |
| Low Income Taxpayer Clinic cases | Amount in dispute usually under $50,000 | Taxpayers under the clinics' income threshold | IRS Low Income Taxpayer Clinics page |
Change log
The dates on which the figures above last changed, most recent first.
- July 21, 2026: IRM 5.14.5 revised. The streamlined installment agreement became the Simple Payment Plan, the two-tier balance structure and the earlier time limit were removed, direct debit stopped being required, and business limits were written in
- July 8, 2026: the IRS announced the Automatic Exemption from Penalty, which replaces First Time Abate for returns with original due dates on or after January 1, 2027
- April 2026: Form 656-B and Form 433-A (OIC) revised
- March 3, 2026: the IRS updated the payment plan fee table to the amounts shown above
- October 1, 2026: all figures on this page checked against IRS.gov
Where we come in
A threshold only helps once you know your own number. We read the IRS account transcripts for every open year so the balance, the penalties and the collection date for each assessment are known before you choose an option, and we explain in writing which options those numbers support. If the answer is a Simple Payment Plan you can open online yourself, we will say so. We give you a scope and a price in writing before anything starts. The tax resolution page describes the scope.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on October 1, 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
