Last Updated: July 9, 2020
It’s in your best interest to pay your tax debt as soon as possible because paying sooner rather than later can limit the penalties and interest the IRS may charge.
However, if you can’t pay your taxes in full, the IRS offers a number of payment options. Depending on the type of tax you owe, and how much, you have different options, ranging from short term extensions, to installment agreements, to an offer in compromise. Each has different requirements and fees.
Payment plans are just one option if you can’t pay. Visit I can’t pay my taxes for other options.
Before you can enter into any payment agreement with the IRS, you need to file all your required tax returns. This way, all the taxes you owe will be included in one plan.
and you haven’t received an IRS notice. You can make estimated tax payments or federal tax deposits before filing your tax return, and voluntary payments after you file, reducing the penalties and interest. You can use the IRS Electronic Federal Tax Payment System (EFTPS), as well as other electronic payment options.
If you owe individual tax debts or business taxes on an active or closed business or once you have an IRS notice. If you’ve received a notice from the IRS, call the number on the notice to make payment arrangements.
If the IRS agrees to an installment agreement or an offer in compromise, you’ll need to make payments based on your agreement with the IRS. You’ll also need to stay current in filing and paying your taxes during the time of the agreement, and if you enter into an offer in compromise, for five years after the IRS accepts your offer.
Usually the IRS has ten years from the date it assessed the tax (placed on your account) to collect the tax. The IRS will extend the time it has to collect while your request for an installment agreement or offer in compromise is pending. Other actions can extend the time to collect as well. IRS Publication 594, IRS Collection Process, covers this topic in detail.
If you’re eligible for an installment agreement or offer in compromise, and the IRS denies your request or rejects your offer, you have the right to appeal that decision to the IRS Office of Appeals. Use Form 9423, Collection Appeal Request.
The IRS is generally prohibited from enforced collection whenever a request for a payment plan or an OIC is pending. Also, the IRS’ time to collect is suspended or prolonged whenever a request for a payment plan or an OIC is pending. Refer to Tax Topic No. 160 and Tax Topic No. 204.
Also, see Publication 594, IRS Collection Process.
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 aren’t 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 (LITC). LITCs also provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language.