<prompt> Human: So I received a letter from the IRS stating that my taxes were filed incorrectly for my 2014 taxes and now I owe 4200. I called my tax person to help get an explanation but they are out on vacation but I have enough time to settle this by when they get back and I just want to be ahead of the game. 2014 was a little tricky year for me as I had 3 different jobs and I withdrew from my Roth for a down payment on my first home. The rep over the phone misheard my amount and withdrew my whole amount instead the 10k limit and I found out when it was too late to resolved it which I knew I would owe money for it. I ended up paying about 5000 in taxes that year for it thinking Im done with that. Now that I have this letter Im freaking out and Im just looking for worst case for my wife and I to deal with. Looking back at our taxes we noticed I was missing one W2 form for a job I had for 5 months and is my fault but I maybe made about 15k for those 5 months but Im just thinking 4200 taxes I owe from that! Any suggestions? If I do owe it, does the IRS have a fair payment plan like not paying fees or interest?  <response>: If I do owe it, does the IRS have a fair payment planYes. like not paying fees or interest?Nope.The general Failure To Pay FTP penalty rate is 0.5 of the unpaid tax per month or part of a month. The IRS interest rate is currently 4 per year, compounded daily and charged on the unpaid tax and penalties. The interest rate can be increased or decreased on a quarterly basis. Respond to the CP2000 as soon as possible. If you have questions about the notice, call the toll-free number in the top right corner of page one.If you determine the proposed assessment is correct and you cant afford to pay in full with your reply, send the largest amount you can comfortably afford. You should receive a CP2122 in about 90 days. If you can find a way to pay the balance on your notice by the due date, you are done.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, including the accruals od FTP and interest, 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 notice 72 your minimum payment. There is currently 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 noticeYou 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 noticeIf you know you cant full pay immediately or within the 120 days time frame when you submit your reply, you can include Form 9465 to make the IA request.Most 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. 