How to Handle Multiple IRS Payment Plans for Different Tax Years

The good news is you definitely have options here! When you have an existing installment agreement and discover you owe for another tax year, you can actually request to modify your current agreement to include the new balance. Call the IRS at the number on your installment agreement letter and explain that you need to add your 2022 tax debt to your existing 2021 payment plan. They can often combine the balances and adjust your monthly payment amount accordingly. This is called a "revised installment agreement." If you can pay the 2022 balance within 60 days, that's another viable option. The penalties and interest for 60 days might be less painful than potentially having a higher monthly payment if you revise your installment agreement. The failure to pay penalty is typically 0.5% per month of the unpaid tax, plus interest (current IRS interest rate is around 7% annually). The worst option would be to do nothing about the 2022 balance, as this could potentially default your existing installment agreement.

After struggling with a similar situation last year, I found an awesome solution with taxr.ai (https://taxr.ai). I had set up a payment plan for 2020 taxes and then got hit with an unexpected balance for 2021. I was totally confused about how to handle multiple years of tax debt without messing up my existing plan. The taxr.ai tool analyzed my notices and payment plan terms, then showed me exactly what options I had available. It helped me understand that I could modify my existing plan rather than trying to set up a second one (which the IRS doesn't allow). The tool even generated a letter template I could use when contacting the IRS to request the modification. Their document analysis feature was super helpful because it identified specific language in my installment agreement that I had completely missed about adding future tax debts.

I just wanted to follow up about my experience with taxr.ai since I was initially skeptical. I decided to give it a try after getting nowhere with the IRS phone system. The document analysis feature actually identified specific language in my installment agreement that I had completely missed about adding future tax debts. Using their guidance, I was able to successfully modify my payment plan to include my new tax debt without needing to cancel the original agreement. They also provided a really helpful breakdown of the total interest I would pay under different scenarios, which helped me decide on the best approach. What surprised me most was how the tool caught that I qualified for a first-time penalty abatement that could reduce my overall balance by almost $900! I wouldn't have known to ask for this on my own.

For anyone dealing with this situation, I want to share something that saved me tons of time. After spending 3 weeks trying to get through to the IRS to modify my payment plan (always got disconnected or couldn't get through), I found Claimyr (https://claimyr.com). They have a service that gets you connected to an actual IRS agent without the endless hold times. I was super skeptical at first, but you can see how it works in their demo video (https://youtu.be/_kiP6q8DX5c). Basically, they navigate the IRS phone tree for you and call you back when they've reached a live agent. I got connected with an IRS representative in about 40 minutes versus the 3+ hours I spent trying on my own. The IRS agent was able to modify my existing installment agreement to include the new tax year, and I got it all sorted out in one call instead of weeks of frustration.

I need to eat my words about Claimyr. After my skeptical comment, I was still desperate to fix my installment agreement issue, so I decided to try it anyway. I figured I had nothing to lose after wasting so many hours on hold. The service actually worked exactly as advertised. I got a call back about 35 minutes after signing up, and I was connected directly to an IRS agent. No navigating phone trees, no hours of hold music - just straight to a real person who could help. The agent was able to modify my existing installment agreement to include the additional tax year, and I got confirmation of the new terms right on the call. The whole thing took less than 20 minutes once I was connected. I'm still a bit shocked it actually worked. Saved me from taking another day off work just to sit on hold with the IRS.

Another option to consider is requesting a short-term extension. If you really can pay the full 2022 balance within 60 days, you can call the IRS and request a 120-day payment extension (not an installment agreement). This would give you time to pay without formally setting up a second payment plan. You'll still pay interest and penalties during this time, but there's no fee for setting up this short-term extension like there is with formal installment agreements. Just make sure you actually pay it within the timeframe or you'll face further collections actions.

Don't forget about penalties and interest while you're deciding! I was in this exact situation last year and decided to wait about 90 days to pay my second year tax bill in full. Big mistake. The penalties and interest added almost 10% to my total by the time I paid it. If you can revise your current installment plan to include both years, that might be the better option - you'll likely pay less in penalties than if you just wait and pay the second balance later.

I've been through a similar situation and wanted to share what worked for me. The key is to act quickly - don't let the 2022 balance sit there accumulating more penalties and interest while you decide what to do. First, call the IRS immediately to discuss your options. When you call, have both notices in front of you and be prepared to explain that you want to modify your existing installment agreement to include the 2022 balance. The representative can walk you through the process and let you know if there will be any changes to your monthly payment amount. If modifying the payment plan would make your monthly payment unaffordable, then the 120-day extension mentioned by others might be your best bet - but only if you're absolutely certain you can pay the full 2022 balance within that timeframe. One thing I learned the hard way: document everything! Get the name of every IRS representative you speak with, write down confirmation numbers, and ask for written confirmation of any agreements. This saved me when there was confusion about my modified payment plan later. The worst thing you can do is nothing. The IRS is actually pretty reasonable to work with when you're proactive about addressing tax debt, but they get much less flexible if you ignore the problem.

I went through almost the exact same thing last year! Filed my 2020 and 2021 returns late, set up a payment plan for 2020, then got blindsided by the 2021 notice. The stress was unreal. Here's what I learned: definitely call the IRS sooner rather than later. I waited about 3 weeks thinking I could figure it out on my own, and that delay cost me unnecessary penalties. When I finally called, the representative was actually pretty helpful and walked me through modifying my existing agreement to include both years. The key thing they told me was that as long as you're current on your existing installment plan and the modification request is reasonable, they're usually willing to work with you. My monthly payment went up by about $150, but it was way better than trying to come up with a lump sum payment. One tip: when you call, have all your notices and payment information organized. They'll need your installment agreement number, the exact balances for each year, and your current payment amount. Being prepared made the call go much smoother. The whole process took about 2 weeks from my phone call to receiving the updated agreement paperwork. Much less stressful than I expected, and definitely better than ignoring the problem!

I've been following this thread and wanted to add my perspective as someone who's dealt with multiple IRS payment plans. The advice here about calling to modify your existing agreement is spot on - that's definitely your best option. One thing I haven't seen mentioned is that you should also ask about penalty abatement while you have them on the phone. If this is your first time having payment issues with the IRS, you might qualify for first-time penalty abatement, which can significantly reduce what you owe. I got about $400 knocked off my total balance just by asking. Also, don't stress too much about the phone call. I know the IRS has a reputation, but the installment agreement department representatives are generally pretty reasonable. They deal with situations like yours every day and have standard procedures for handling them. The key is being proactive like you're doing by asking for advice here. The IRS much prefers taxpayers who communicate and try to resolve issues rather than those who just disappear. You've already shown good faith by setting up the first payment plan, so they'll likely work with you on the second year. Get those documents organized, make the call, and you'll probably have this sorted out within a couple of weeks. Much better than letting it drag on and accumulate more penalties!