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The IRS has payment options available when you can’t pay your taxes. This page will offer some general information and help guide you in the right direction.
Payment options generally depend on how much you owe and your current financial situation. Each option has different requirements, and some have fees.
If you are a business owner 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
Taking action as soon as possible will help ease the future burden and help stop the IRS enforced collection, like levying your bank account or wages.
File any unfiled returns as soon as possible. Returns can be filed with or without a payment. Filing your return by the due date can avoid late filing penalties.
The IRS charges daily interest on unpaid taxes, so the sooner the tax is paid, the less interest you will owe.
Consider your entire financial situation. Make a list of your assets, and monthly income and expenses to decide how much you can pay monthly towards 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, the IRS has several options to Make a Payment.
If you can’t pay
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 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 go away, and applicable penalties and interest will continue to be added to the balance.
The IRS doesn’t suspend interest and penalty charges, and they will continue to grow until the balance is paid in full or the time to collect has expired.
The IRS may keep your tax refunds and apply them to your tax debt.
You can make voluntary payments at any time.
The IRS can issue a levy to satisfy a tax debt when you don’t respond to notices informing you of the tax debt and asking for payment.
The IRS may file a Notice of Federal Tax Lien (NFTL) even if your account is placed in CNC status. A NFTL may affect your credit rating, and ability to sell property or other assets.
The IRS is required by law to notify the State Department if you are certified as owing a seriously delinquent debt. But, the IRS has discretion to exclude debts from passport certification that are CNC.
The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.
Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.
Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.
The taxpayer Bill of Rights is grouped into 10 easy to understand categories outlining the taxpayer rights and protections embedded in the tax code.
It is also what guides the advocacy work we do for taxpayers.
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