You owe the IRS for crypto gains, and paying the full amount right now is not realistic. A payment plan is not ideal, but it beats the alternative. Here is how irs payment plan crypto taxes works.
Streamlined vs. Non-Streamlined
If your total balance including penalties and interest is $50,000 or less, you can get a streamlined installment agreement without submitting detailed financial information to the IRS. You pick a monthly payment that pays the balance within 72 months, set up direct debit, and you are done. If you owe more than $50,000, you must submit Form 433-A with full financial disclosure.
The Application Process
For balances under $50,000, you can apply online through the IRS website, by phone, or by mailing Form 9465. For larger balances, you submit Form 9465 with Form 433-A. The IRS typically approves or denies within 30 days. Collection activity is generally suspended while your application is pending.
Staying in Compliance
Once approved, you must make every payment on time. You must file all future tax returns by the deadline. You must pay all future taxes in full. Missing a payment or filing late can default the agreement and restart the collection process from scratch.
When a Payment Plan Is Not Enough
If the monthly payment required to satisfy your balance within 72 months is more than you can afford, a partial-pay installment agreement may work. These set payments at your actual ability to pay, even if the balance will not be fully paid before the collection statute expires. This requires financial analysis and negotiation.
Frequently Asked Questions
Can I pay crypto taxes over 6 years?
Yes. Streamlined installment agreements allow up to 72 months for balances under $50,000. Larger balances may qualify for longer terms depending on the Collection Statute Expiration Date.
What if I miss an installment payment?
Missing a payment can default the agreement, restarting the collection process. Contact the IRS before missing a payment to request modification. Setting up direct debit reduces the risk of missed payments.
Can I pay my crypto tax with cryptocurrency?
The IRS does not currently accept cryptocurrency as payment. You must convert crypto to fiat to make tax payments. The conversion itself may trigger additional capital gains or losses.
Get Crypto Tax Help Now
Dealing with irs payment plan crypto taxes can feel overwhelming, but there are options. Call the Law Offices of Darrin T. Mish, P.A. at (813) 229-7100 for a free consultation. We have resolved over $100 million in IRS tax debt.