Question

Do IRS payment plans affect your credit?

Answer 1

IRS payment plans and agreements are not reported to the credit agencies so by setting up an IRS payment plan will not affect your credit or credit score.

The IRS does not report any of your payments or delinquent IRS taxes to the credit agencies as it's not credit that you are owing to them.

Both owing the IRS or making payments to the IRS on your income taxes will not affect your credit score.

So if you need to setup a payment plan with the IRS to pay your back taxes you owe then there's no need to worry about your credit score being affected.

Just continue to make the IRS income tax payments as you agreed to on and they cannot take anything you own or seize your bank accounts etc.

But if you default on the payments the IRS could seize your property, bank accounts, garnish wages etc.

Answer 2

While acceptance isn't guaranteed, the IRS doesn't usually require additional financial information to approve these plans. With a streamlined plan, you have 72 months to pay.

The minimum payment is equal to your balance due divided by the 72-month maximum period.

An IRS payment plan works best for people who are only behind on the current year's taxes and who have no other way to pay within a month of the tax deadline.

It's important to keep in mind that payment plans aren't something you should rely on.