CP89 Notice From IRS: Installment Agreement Annual Statement

CP89 Notice From IRS: Installment Agreement Annual Statement

When Does the IRS Send a CP89 Notice?

If you are making monthly tax debt payments for the IRS installment agreement you and the IRS signed, then you will receive a CP89 notice every year until your back taxes are paid in full. CP89 notices contain important information about each installment payment you have made, how much you still owe on the tax debt, and the amount of interest and penalties you have paid since entering the agreement.

Is a CP89 Notice a Bill for My Installment Agreement?

No, a CP89 notice is not a bill. In fact, the CP89 page entitled “Annual Installment Agreement Statement–This is for your information”, has the description “THIS IS NOT A BILL” printed at the top.

There are three pages included with a CP89 notice: the “Payment Detail” page, the “Penalties and Interest” page, and the “Installment Agreement Activity” page. In addition, the IRS explains on the last page that you have the option of paying the full amount by calling them to confirm a current payoff amount.

What Payment Details and Activity are Included in My Annual Installment Agreement Statement?

CP89 Penalties and Interest Page

As long as you owe any money to the IRS, they will continue charging interest, and sometimes penalties, on that tax debt. The 2023 quarterly interest rate for individuals is 7%. According to the IRS, penalties and interest rates are subject to change each quarter.

You can view current IRS interest rates at https://irs.gov/payments/quarterly-interest-rates.

CP89 Payment Detail Page

This page shows the dates you made installment agreement payments, the total amount of payments made in one year, and which tax form these payments were applied to.

CP89 Installment Agreement Activity Page

Information provided on this page includes:

  • Tax form type/number
  • Beginning balance
  • Total payments received by the IRS
  • Total penalties added
  • Total interest added
  • Other charges added
  • Ending balance

Who Do I Contact If My IRS CP89 Has Missing Payments?

If you believe your CP89 is missing payments or payments weren’t applied correctly to your installment agreement, call the IRS at 800-829-1040 (Monday through Friday from 7am to 7pm local time). When you speak with an IRS representative, you must provide information that confirms your identity, such as your Social Security number and birth date, before the representative can proceed to review your CP89 and installment payments activity.

Taxpayers who receive CP89 notices may also ask for a face-to-face meeting with an IRS agent at their local IRS office. To find your local IRS office for taxpayer assistance, visit https://apps.irs.gov/app/office-locator/.

Will the IRS Let Me Modify My Installment Agreement If I Can’t Afford My Current Monthly Payment?

Yes, the IRS allows modifications to installment agreements if you can no longer make monthly payments. In most cases, you can use the IRS online payment agreement tool to request changes such as the monthly payment amount and the monthly due date.

However, any changes to the monthly payment amount must meet the minimum payment requirements established by the IRS. Also, the IRS may ask you to submit a new collection information statement (Form 433-A) if you want a lower monthly installment agreement payment. They need this information to determine whether your financial situation has changed.

In addition to requesting a different monthly installment amount, you may also be able to reinstate an installment agreement if you recently defaulted on the agreement.

Taxpayers who can make payments on a tax debt but can’t finish paying off the debt within a certain timeframe may qualify for a partial payment agreement. This allows you to keep making payments until the expiration of the collection period. In addition, the partial payment agreement means paying off a debt for less than the full debt and potentially preventing the IRS from levying or seizing your assets.

Need more help? You can schedule a free call or start online by answering 6 simple questions. We never charge for ‘investigations’ or consultations.

6 Simple Questions. Free Evaluation.


Join our Newsletter

Enter your email address to join our free newsletter. Get all the latest news and updates.