The IRS Online Payment Agreement system lets you apply and receive approval for a payment plan to pay off your balance over time. Use Form 9465 to request a monthly installment plan if you cannot pay the full amount you owe shown on your tax return (or on a notice we sent you).Letter 2840C: This letter confirms your Installment Agreement you requested when filing a balance due return, and confirms the payment date and amount. You can actually set a payment plan up with the irs you don't have to pay off the whole lump sum and you can get still get pre-approved to buy your home. To apply, you can submit IRS Form 9465, Installment Agreement Request. When you submit an Offer in Compromise to the IRS, it must be submitted on a special Form 656 with any attachments that are required. Use Form 9465 to request a monthly installment agreement (payment plan) if you can't pay the full amount you owe shown on your tax return. In this chapter, I will discuss the different types of installment payment agreements available through the IRS, their terms, how to apply and set-up costs. The IRS allows taxpayers to set up an installment agreement. Request an installment agreement and, if necessary, a Collection Appeals Program (CAP) hearing prior to additional IRS collection activity (lien or levy).