<prompt> Human: I made a mistake filing in 2014, and owed 1550 for 2015, and also just got notified that I owe the leftover from 2014, which is 1900 ish.What are my options here? Can I workout a payment plan with the IRS for both of them? I dont have the capital in my bank account right now to pay the full 3500 that I owe.  <response>: Im assuming you filed your 2015 federal return timely, and you received a CP 014 with your initial balance due assessment. The most common penalty is the Failure To Pay FTP. The FTP accrues until the tax liability is paid at 0.5 of the tax per month or part of a month.The IRS interest rate is currently 4 per year, compounded daily on the unpaid tax and penalties. The interest rate can be increased or decreased on a quarterly basis.The short-term payment plan can be up to 120 days, and it is called a Full Payment Agreement. With this plan, there is no requirement for a fixed monthly payment. The Service calculates the balance due out to 120 days from the request date, and you agree to pay in full by that due date. During the 120 days you could make one payment or 100 payments. There is no fee to request this agreement.If you need more than 120 days, the next payment plan is a formal Installment Agreement IA. With an IA, you agree to a monthly payment amount and a fixed due date. The general rule is the amount due on your notices 72 your minimum payment: 49.00.There is a one-time 120 fee to establish an IA, and you may qualify for a reduced 43 fee. When an IA is accepted the monthly FTP rate is generally reduced to 14. With a regular IA, you receive a monthly reminder notice You have the option of sending payments by mail, and there are many electronic payment options availableYou can also request a Direct Debit Installment Agreement DDIA by providing your bank routing and checking account number. The user fee for a DDIA is reduced to 52, or the 43 if you qualify. There are no reminder notices issued on a DDIA.Missed payments, late payments, payments with non-sufficient funds, or a new balance due can result in a default status. There is generally a 50 fee to reinstate any defaulted agreement.Any refunds you claim on future federal and possibly state tax returns will be offset to the unpaid balance due. If an offset occurs, you will be sent a noticeMost IRS payment plans require the Taxpayer to be filing compliant. This generally means you have filed all required returns within the prior six years. An IRS payment plan protects you from enforced collections actions, such as wage or bank levies or, in most cases, a Notice of Federal Tax LienYou can set up new payment plans at IRS.gov Online payment Agreement Have a copy of your notice handy when you access the system.You can call 1-800-829-0922 M -F 7am - 7pm local time and speak with a representative. They will ask some verification questions, research your account, and provide your payment options.You can visit your local Taxpayer Assistance Center TAC for face-to-face help with an IA. Please note: many TACs now require appointments. 