The Online Payment Agreement (OPA) is a website tool practitioners (and taxpayers) can use to apply for certain types of payment agreements with the IRS. To use the tool, you must be an authorized representative (i.e., you must have a signed power of attorney on file with the IRS). Two types of agreements are eligible for this tool: short-term extensions and monthly payment plans (i.e., installment agreements).
Short-term extensions allow a taxpayer to receive an extension of up to 120 days. These types of agreements are essentially collection holds. The IRS won’t pursue collection actions (liens, levies, etc.) but interest and penalties continue to accrue. There is no setup fee charged with short-term extensions. An installment agreement allows a taxpayer to make scheduled monthly payments. A setup fee is charged to establish an installment agreement.
Apply for an Agreement Using the OPA Tool
Go to the Online Payment Agreement Application and follow these three steps:
- Determine if your client is eligible to use the OPA tool. To use the OPA tool, an individual taxpayer must owe $50,000 or less in combined tax, penalties and interest, must have filed all required returns, and must be able to pay off the debt in full within 72 months. If an individual taxpayer owes between $25,001 and $50,000, payments must be made by direct debit. Business entities may use the OPA tool if they owe $25,000 or less in combined tax, penalties and interest, and have filed all required returns.
- Gather your client's information. For an individual taxpayer, you will need his or her Social Security number (SSN) and secondary SSN if your client files married filing jointly, date of birth, PIN (you may create one if your client doesn't already have one), and last year’s adjusted gross income. Also, have your client’s bank account and address and employer address available. For a business client, you will need their Employer Identification Number (EIN), date the EIN was assigned, and business address. Always have a good idea of the highest amount your client can pay, and when they plan to make payments. If your client received a notice or letter, have it in front of you. Finally, to log in as your client’s power of attorney, have your Centralized Authorization File (CAF) number in front of you to enter into the application (the number is shown on your completed Form 2848).
- Submit the application. If the agreement is accepted, you will be notified immediately. Print the notification page for your records. The notification page will contain the payment terms, including the amount of the payment and when each payment is due. Note that the IRS has stated that most applications are approved.
Additional Guidance and Resources
The system application is available:
- Monday – Friday, 6am-12:30am ET
- Saturday, 6am-10pm ET
- Sunday, 6pm-midnight ET
If a client doesn’t qualify to use the OPA tool, they may still apply for a payment agreement. Other ways to apply for an installment agreement include: filing Form 9465, Installment Agreement Request (individual taxpayer) or Form 433-D, Installment Agreement (business taxpayer), or simply calling the IRS. In certain instances, such as if you client can’t pay the entire balance owed before the collection statute expires, be prepared to provide a collection information statement to the IRS (Form 433-F for wage earners and self-employed taxpayers, or Form 433-B for businesses).
- Navigating the Murky Waters of IRS Payment Agreements, Article that discusses payment agreements, the pros and cons of each type, and best practices, The Tax Adviser, July 2016.
- 14 IRS Collection Issues for Practitioners to Consider: Practice guide that addresses commonly violated and/or misinterpreted IRS collection procedures and helps practitioners understand their clients' rights.
- IRS Video Portal, View videos about how to use the IRS OPA tool.
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