IRS Form 433-D “Installment Agreement” Explained

IRS Form 433-D, Installment Agreement, is the form used to put an IRS payment plan in writing. Once you and the IRS agree on a monthly payment amount, Form 433-D records the terms: how much you’ll pay, when payments are due, which tax periods are covered, and how the payments will be made. It is often confused with the 433-A and 433-F financial statements, but Form 433-D does not ask about your finances. It is the agreement itself.

When Is Form 433-D Used?

You will usually see Form 433-D in one of these situations:

• An IRS employee set up your plan. After you agree on terms by phone or with a revenue officer, the IRS often mails a Form 433-D for you to sign and return.
• You want to pay by direct debit. Form 433-D includes the bank routing and account information the IRS needs to withdraw payments automatically from your checking account (a Direct Debit Installment Agreement).
• You are confirming terms in writing. Even if you applied with Form 9465 or the IRS Online Payment Agreement tool, the IRS may send a 433-D to finalize the agreement.

If you’d rather have payments taken from your paycheck, the related form is Form 2159, Payroll Deduction Agreement.

What Information Does Form 433-D Ask For?

• Your name, SSN or EIN, address and phone numbers (and your spouse’s, for a joint liability)
• The kinds of taxes and tax periods included in the agreement
• The amount you owe and the agreed payment amount, along with the payment date each month
• Any scheduled increases or decreases in the payment amount
• Bank account information, if you are choosing direct debit
• Your signature (and your spouse’s, if the debt is joint)

Why Direct Debit Matters

Direct debit agreements tend to be easier to keep current because payments happen automatically, and the IRS usually charges a lower setup user fee for them than for other payment methods. Low-income taxpayers may qualify for a reduced or waived fee. The fees change from time to time, so check the current amounts on the IRS payment plans page.

The Terms You’re Agreeing To

Signing Form 433-D means accepting the standard installment agreement conditions. The most important ones:

• Pay on time, every month. Missed payments can put the agreement in default.
• File and pay future taxes on time. A new unpaid balance or an unfiled return can also cause a default.
• Interest and penalties continue. Interest keeps accruing until the balance is paid. The failure-to-pay penalty generally drops to a lower monthly rate while an agreement is in effect, if you filed the return on time.
• Refunds are applied to the debt. The IRS will keep future refunds and apply them to what you owe.
• A federal tax lien may still be filed, depending on the amount owed and the type of agreement.

As long as the agreement is in good standing, the IRS generally won’t levy your wages or bank accounts for the covered balance.

Common Mistakes to Avoid

• Agreeing to a payment you can’t sustain. It’s better to document a realistic amount up front than to default later.
• Leaving out a tax period, so a separate balance keeps going through collection.
• Giving the wrong bank routing or account number on a direct debit agreement.
• Forgetting the spouse’s signature on a joint liability.

How Form 433-D Fits With Other IRS Forms

For larger balances, or when the IRS needs to see your finances before approving a payment amount, you may first have to complete a Collection Information Statement. That is Form 433-A or Form 433-F for individuals, and Form 433-B for businesses. If you can’t afford a payment plan at all, an offer in compromise or currently-not-collectible status may be worth evaluating.

Get Help From Diehl CPA

IRS collection and appeal procedures have strict deadlines, and what you submit becomes part of the record. Diehl CPA, led by Mark Diehl, CPA, CFE, represents taxpayers before the IRS and can prepare the forms, gather the documentation, and deal with the IRS for you. Learn about our tax relief services or contact us to talk through your situation.

This article is general information, not tax or legal advice for your specific situation. Updated October 2026.