Explainer videos
Short videos on the questions readers ask most. Each one links to the full guide.
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Back taxes, in the right order
Back taxes are federal taxes from an earlier year that are still unpaid, plus the penalties and interest since.
Step one: confirm the balance in your IRS online account, by year, before you agree to anything.
Step two: file any missing returns. Filing late costs ten times more than paying late.
The late payment penalty is 0.5% of unpaid tax per month, up to 25%.
Interest is 7% a year through December 2026, compounded daily, and it also runs on the penalty.
Step three: choose a plan. Short-term plans run up to 180 days with no setup fee.
The IRS generally has ten years from assessment to collect. Doing nothing does not run that clock down safely.
Confirm the balance, file missing returns, then choose a payment route. The costs and limits behind each step.
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When you cannot pay the bill
File on time anyway. The late filing penalty is 5% a month, ten times the late payment penalty.
Late payment costs 0.5% a month, up to 25% of the unpaid tax.
Pay whatever you can by the deadline. Every dollar paid cuts both the penalty and the daily interest.
A short-term plan gives up to 180 days with no setup fee, for balances under $100,000.
On an approved plan, with the return filed on time, the penalty drops to 0.25% a month.
An Offer in Compromise costs $205 to apply, waived if you qualify as low income. It is not for everyone.
No legitimate service can make a real tax debt disappear. Be careful with anyone who promises that.
File on time anyway, pay what you can, and pick the cheapest IRS arrangement for the rest.
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Catching up on unfiled returns
The IRS normally enforces the last six years of unfiled returns, under its own policy statement.
Use IRS wage and income transcripts to rebuild records you no longer have.
The failure-to-file penalty is 5% of unpaid tax per month, capped at 25%.
For returns more than 60 days late, the minimum penalty is $525 or the full tax, whichever is less.
Refunds have a deadline too. You have three years from the original due date to claim one.
File each year on that year's own Form 1040. Only the current and two prior years can be e-filed.
Which years to file, where to get the records, and what the delay is costing you.
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If you do not pay: what follows
The sequence is slow and predictable. A 0.5% monthly penalty and daily interest start after the due date.
The IRS then mails a bill, reminders, and finally a notice of intent to levy.
You get at least 30 days after that final notice before a levy can happen.
Once a levy notice is issued, the late payment penalty doubles to 1% a month.
A seriously delinquent balance, $66,000 in 2026, can affect your passport.
Every stage has an exit. Payment plans, hardship status and appeals all stop the escalation.
The IRS collection sequence, from the first bill to a levy, and the warnings you get along the way.
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Failure to pay penalty: the IRS charge for tax paid late
The IRS failure to pay penalty is 0.5% of your unpaid tax for each month or part of a month after the due date, up to 25%.
Standard rate: 0.5% of unpaid tax per month or part of a month.
Cap: 25% of the unpaid tax.
On an approved plan, filed on time: 0.25% per month.
The rate doubles to 1% a month if you do not pay within 10 days after the IRS sends a notice of its intent to levy.
The IRS failure to pay penalty is 0.5% of unpaid tax a month, up to 25%. It drops to 0.25% on a payment plan and rises to 1% after a levy notice.
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IRS audit guide: how audits start, run and end
An IRS audit is a review of a filed tax return to check that income, deductions and credits were reported correctly, and the IRS always starts one by mail, never by phone.
How audits start: By mail only; the IRS does not open an audit by phone.
Usual look-back: Returns filed in the last 3 years; generally no more than 6.
Mail audit extension: One automatic 30-day extension, usually granted.
The IRS tells you about an audit by letter sent to the address on your latest return or the address the IRS has on file.
The IRS runs audits in three ways: by mail (a correspondence audit), in an IRS office (an office audit) or at your home, business or representative's office (a field audit).
The IRS selects returns in three ways: random selection, computer screening that compares a return against statistical norms for similar returns, and links to another taxpayer's audit, such as a business partner or investor.
What is the IRS audit meaning in simple terms? It means the IRS is double-checking some or all of a filed return against your records.
An IRS audit always starts with a letter in the mail. How mail, office and field audits work, how far back the IRS can go, and how to dispute the result.
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IRS penalties and interest: what you are charged and how to get relief
The two IRS penalties most people face are the failure-to-file penalty (5% of unpaid tax per month, up to 25%) and the failure-to-pay penalty (0.5% per month, up to 25%), plus interest at 7% a year for late 2026.
Failure-to-file penalty: 5% of unpaid tax per month or part of a month, max 25%.
Failure-to-pay penalty: 0.5% per month, max 25% (0.25% on a plan, 1% after a levy notice).
Minimum late-filing penalty: $525 or 100% of the tax, if less, for returns due after 2025 and filed more than 60 days late.
Interest runs on unpaid tax from the original due date until the balance is paid in full.
On July 8, 2026 (IR-2026-83), the IRS announced the Automatic Exemption from Penalty (AEP).
If you cannot pay the balance, a filed-on-time taxpayer with an approved plan pays the lower 0.25% monthly late-payment rate.
What is the most common IRS penalty? For individuals, the failure-to-pay penalty is the one most people see, because it applies to any balance not paid by the April due date even when the return was filed on time.
Every main IRS penalty explained: 5% a month for filing late, 0.5% for paying late, 7% interest, and the official IRS penalty relief routes for 2027.
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Help with IRS problems: free help, paid representatives and what to avoid
Unlimited representation rights: Enrolled agents, CPAs and attorneys.
Taxpayer Advocate Service cost: Always free.
LITC income limit: Generally 250% of federal poverty guidelines.
Most people who owe back taxes can set up a payment plan, request penalty relief and check their balance on their own, at no cost beyond any IRS user fee.
Form 2848, Power of Attorney and Declaration of Representative, lets an eligible professional represent you and act on your behalf with the IRS.
Choose a tax help company by checking who will actually handle your case and what that person's credential is, then compare the proposed fee with what the IRS itself charges.
Match the help to the problem: simple balances need self-service, stuck cases need TAS, low-income disputes suit an LITC, and complex or high-stakes cases justify a paid representative.
Help with IRS problems comes from three places: your own IRS account, free help from TAS and LITCs, and licensed EAs, CPAs or attorneys. How to choose.
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The IRS collection process: liens, levies and your rights
The IRS collection process starts with a bill (usually Notice CP14) and escalates through reminder notices to a Final Notice of Intent to Levy, which must be sent at least 30 days before most levies.
First bill: Notice CP14.
Minimum warning before most levies: 30 days after the Final Notice of Intent to Levy.
Hearing request form: Form 12153, within 30 days.
The IRS collection process follows a fixed order of mailed notices before enforced collection.
A lien is a legal claim against your property; a levy is the actual seizure of it.
IRS enforcement actions range from filing a public lien notice to seizing a house, and the IRS generally uses the least drastic tool that will work.
The IRS collection process runs from a first bill to liens and levies, with a 30-day hearing right before most levies and a 10-year limit on collection.
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Tax extension: what it covers, what it does not, and how to get one
A federal tax extension gives individuals six more months to file, moving the tax year 2026 deadline from Thursday, April 15, 2027 to Friday, October 15, 2027.
Last day to request a 2027 extension: Thursday, April 15, 2027.
Extended filing deadline: Friday, October 15, 2027.
Tax extension form: Form 4868 (or an electronic payment marked as an extension).
A tax extension does not extend the time to pay. The IRS states plainly that the extension is to file only; tax you owe must be estimated and paid by the April deadline (IRS).
The IRS accepts three methods, and each one gives the same six extra months.
No. Requesting a tax extension is free and carries no penalty of its own.
A tax extension moves your filing deadline to October 15, 2027, but tax owed is still due April 15, 2027. How to request one and what it costs if you owe.
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Form 843 for penalty abatement: a line-by-line guide
Form 843, Claim for Refund and Request for Abatement, is the IRS form for asking in writing that a penalty or certain interest be removed, or refunded if already paid.
Full name: Form 843, Claim for Refund and Request for Abatement.
Current revision: December 2024.
One form covers: One tax period and one type of tax.
Yes. The IRS accepts First Time Abate requests by phone, by written statement or on Form 843, and you do not have to name First Time Abate or attach documents.
Page 1 starts with a list of reasons grouped under Tax, Penalty, Interest and Other.
The table uses a common case: a failure-to-pay penalty of $412 on a tax year 2025 Form 1040 that has not been paid yet.
Is there a faster way than mailing Form 843? Often, yes. The IRS accepts many penalty relief requests, including First Time Abate, by phone at the number on the notice.
Form 843 asks the IRS to remove or refund a penalty or interest charge. See which boxes to check, what goes on each line, where to mail it and what happens next.