You cannot pay your tax bill. What now?
File on time anyway, pay what you can, and pick the cheapest IRS arrangement for the rest.
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Read the full guide: Can't Pay Taxes? Your IRS Options If You Owe Money
Transcript
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.
