An official website of the United States Government (NON-Prod - Development Environment)If you can’t pay the taxes you owe, the IRS has payment options available. Which option might work for you generally depends on how much you owe and your current financial situation. Each option has different requirements and some have fees.
If you own a business and are still “in business,” the rules for obtaining a payment arrangement are slightly different, particularly if you have employees and owe employment-related taxes. If this is your situation, you’ll need to work directly with the IRS to determine an acceptable arrangement
Most options for paying off a tax debt work best if you are proactive. By taking an action as soon as possible, you’ll help ease the burden and keep the IRS from acting to collect the debt. This page will offer some general information and help guide you in the right direction.
If you need to file a tax return, you should, even if you’ll owe taxes when you file.
You should file your return on time, with or without a payment — the IRS can charge penalties for filing late. The IRS also charges daily interest on unpaid tax bills, so the longer you wait, the more interest you’ll owe.
You need to consider your entire financial situation. Make a list of your assets and income, and consider other debts you might owe to figure out how much you can pay on your tax debt. Before you enter into any kind of payment agreementThe IRS will typically discuss payment options with taxpayers prior to the assessment of additional tax., be sure you can pay that amount every month, on time.
If you can pay the full amount now. You can pay with an electronic funds transfer or with a credit or debit card, or with a check by mailing it to the address listed on your bill or bringing it to your local IRS office.
If you can’t pay the full amount now, but can pay it within 120 days
If you can’t pay in full immediately, the IRS offers additional time (up to 120 days) to pay in full. It’s not a formal payment option, so there’s no application and no fee, but interest and any penalties continue to accrue until the tax debt is paid in full.
For information on the additional time up to 120 days, call the IRS at 800-829-1040 (individuals) or 800-829-4933 (businesses).
If you need to make monthly payments to pay off your debt
You can ask for an Installment Agreement, which is a fixed monthly payment. This is a formal agreement with the IRS and involves an application process and fees.
You won’t be able to pay off the full debt
An Offer in Compromise allows you to pay less than the full amount you owe.
For the IRS to consider an Offer in CompromiseAn agreement between a taxpayer and IRS for a taxpayer to pay less than the full amount owed., you must apply, and must generally pay certain fees and a portion of the debt. You must then file tax returns and make payments on time for five years after the IRS accepts your offer.
If you can’t make any sort of payment now
The IRS understands there may be times when you can’t pay a tax debt due to your current financial situation. If the IRS agrees that you can’t pay your taxes and pay your reasonable living expenses, it may place your account in a status called Currently Not Collectible. The IRS won’t try to collect payment from you while your account is in Currently Not Collectible status, but the debt doesn’t not go away, and penalties and interest continue to grow.
Note: If you have another way of getting money, like borrowing from a bank or an individual, it’s worth considering. The interest rate and fees charged by a bank or credit card company are usually lower than the combination of interest and penalties imposed by the IRS.
If you’ve received an IRS notice, that notice should tell you what actions to take to resolve your issue. Publication 594, The IRS Collection ProcessA taxpayer receives notices of balance due, request for payment, and IRS intent to levy if payment is not received., explains the IRS collection process and the different ways the IRS can collect a tax debt you owe. The IRS also has a video on understanding collection actions.
Browse common tax issues and situations at Get Help
If your IRS problem is causing you financial hardship, you’ve tried repeatedly and aren’t receiving a response from the IRS, or you feel your taxpayer rights are not being respected, consider contacting Taxpayer Advocate Service (TAS).
You may be eligible for representation from an attorney, certified public accountant (CPA), or enrolled agent (EA) associated with a Low Income Taxpayer Clinic/a> (LITC). LITCs may also provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language.
