Does this change from 2020 still apply in 2021: "The IRS will automatically add certain new tax balances to existing Installment Agreements."

Question

I filed my 2021 taxes and found that I owed money. Last year for my 2020 taxes, where I previously owed money, I set up an installment agreement with the IRS. I am again unable to pay the entire amount owed at once.

I saw a page on the IRS website describing the 2020 Taxpayer Relief Initiative implemented due to COVID and it stated: "The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers."

Does this still apply for the 2021 tax year? Or will I have to take additional steps to add my new amount owed to my existing agreement? I've also noticed that my amount owed for 2021 is not yet visible in my IRS online account, and I can't review the amount owed when I try to revise my payment plan on the website.

Critter-3 · Answer

If you owe federal taxes for a prior years and owe again for another tax year , you must apply for a new combined payment plan. There will only be one installment agreement which includes all of the tax years that you owe. You will want to contact the IRS as soon as possible to have it included because a new balance will automatically default your current agreement (It is one of the terms and conditions.)

You can call them at 1-800-829-7650, although there will be long wait times since it is peak tax season. You can go to local office (http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1), but they also have long wait times. If you submit another IRS Form 9465, you can include all of the tax years that you owe with the request to have the new tax year included. It is important to have the new tax year included because collection will start on the new tax year, if it is not added to the agreement. You will know when your return is processed because you will receive a tax bill.

If you owe because of withholding you can use TurboTax to change your W-4, so that you do not owe again next year.

Here is some more information from www.irs.gov: http://www.irs.gov/Individuals/Payment-Plans-Installment-Agreements

From the IRS:

How do I review or revise an existing plan?

Reviewing a Payment Plan

You can view details of your current payment plan (type of agreement, due dates, and amount you need to pay) by logging into the Online Payment Agreement tool using the Apply/Revise button below.

What You Can Change Using the Online Payment Agreement Tool

You can use the Online Payment Agreement tool to make the following changes:

Change your monthly payment amount
Change your monthly payment due date
Convert an existing agreement to a Direct Debit agreement
Change the bank routing and account number on a Direct Debit agreement
Reinstate after default

You can log into the Online Payment Agreement tool using the Apply/Revise button below.

How To Revise an Online Payment Plan

Log in to the Online Payment Agreement tool using the Apply/Revise button below. On the first page, you can revise your current plan type, payment date, and amount. Then submit your changes.

If your new monthly payment amount does not meet the requirements, you will be prompted to revise the payment amount. If you are unable to make the minimum required payment amount, you will receive directions for completing a Form 9465 Installment Agreement RequestPDF and Form 433-F Collection Information StatementPDF.

To convert your current agreement to a Direct Debit agreement, or to make changes to the bank account associated with your existing Direct Debit agreement, enter your bank routing and account number.

If your plan has lapsed through default and is being reinstated, you may incur a reinstatement fee.