IRS Deficiency Notice For $4,893 From 2022 Return - Can I Set Up Payment Plan Instead Of Paying Full Amount?

Keisha Williams · 2025-01-19T08:00:00.000Z

Got a notice from the IRS saying I owe money from my 2022 return. I just received a "Notice of Deficiency - proposed change to your tax" letter that outlines the proposed changes to my 2022 income tax and informs me about my right to challenge these changes. The IRS says my income tax needs to be adjusted because of information they received from others like my employer or bank. They noticed differences between what I reported on my tax form and what they received from these third parties. According to the notice, I have a "Proposed tax you owe (deficiency)" of $5,994. This is quite a bit more than I can pay right now. The notice says "You can contest the changes by filing a petition in the U.S. Tax Court. The last date to file a petition with the Tax Court is April 29, 2025." Under "Next steps," it says "If you agree with our changes, fill out and return the enclosed Form 5564 to indicate your agreement." If I agree to the amount they say I owe, will they demand the full payment or can I set up some kind of payment plan? Really nervous about this whole situation and don't want them garnishing my wages. I don't have nearly $6,000 available to pay immediately, and I'm worried about what happens if I acknowledge I owe this money but can't pay it all at once.