Tax obligation on the installment plan?

I attached a request to set up an installment payment plan to my tax return when I filed it in April. I haven't heard anything yet from the IRS, and I haven't made any payments since the partial payment I sent with my tax return. Should I just wait until I hear from the IRS?

H.K., Chicago

Taxpayers who can't pay all their tax when they file their federal income tax return are encouraged to send as much money as they can with their tax return, and attach Form 9465, Installment Agreement Request to the tax return. On this form you are to indicate how much you will be able to pay on your taxes each month, and the day of the month on which you wish to make these payments.  

The IRS is required to accept your installment agreement request if all of the following points apply:  

• Your total taxes do not exceed $10,000  

• In the past five years you have not failed to file a tax return, failed to pay your tax, or entered into another installment agreement  

• You can't pay your tax when it is due  

• The tax will be paid in three years or less  

• You agree to comply with tax laws while the agreement is in effect  

If everything goes as planned, you will hear back from the IRS within 45 days of filing your tax return, accepting or altering your payment plan, and you can send your monthly payments until the taxes are paid in full. There are of course penalties and interest that continue accruing until all the taxes are paid.  

If you haven't heard anything yet from the IRS, "There's something wrong," according to Pat Brummer, senior communications specialist at the IRS Public Affairs office. "They should have heard something in 45 days."  

Ms. Brummer indicated that you should contact the taxpayer advocates office at 877-777-4778 (toll free) and they should be able to trace the problem and get things straightened out.  Ms. Brummer said that even if you haven't heard from the IRS, you should "Go ahead and start making those payments."  

If you don't meet all of the above criteria, that doesn't mean the IRS won't accept your agreement, it only means that they are not required to do so. The fact that they have not contacted you yet may mean that they didn't see the form. The Form 9465 should have been attached to the top of your tax return, on top of the 1040. If you attached it to the inside of your return it may have gone unnoticed.  

If you are uncomfortable contacting the IRS by phone but want to get started with your payments, you can go ahead and start sending money monthly. You don't need a coupon or a voucher to send with the payments, you can simply attach a letter. Be sure to include your name, address, Social Security number (VERY important!), and indicate the tax year for which you are making a payment. You can state in the letter that you attached Form 9465 to your tax return and have been awaiting a response.  

Send your payments monthly, with a copy of the letter, so that you don't get behind. If you want to send some extra money to make up for the month or two during which you were waiting for a response, I'm sure the IRS won't object!  

In related news, the IRS has finalized regulations that affect taxpayers just like you. For taxpayers who are paying their taxes on an installment agreement, the penalty used to be .5% per month. That rate has been cut in half to .25%, effective for all installment agreements in effect for months after December 31, 1999.  

You don't have to calculate your own penalty and interest, however. Just make your regular payments and the IRS will contact you with information about penalties and interest.