What can I do if I cannot pay my taxes? FAQ and Information
Authored By: Low Income Taxpayer Clinic Legal Aid Service of Collier County
If I can't pay my taxes, what should I do?
If you cannot 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.
The most important thing: take action, do NOT delay.
Most options for paying off a tax debt work best if you are proactive. By taking action as soon as possible, you’ll help ease the burden and keep the IRS from acting to collect the debt.
If you need to file a tax return, you should. You will still owe the taxes, whether or not 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 will owe.
First: Figure out how much you think you can pay
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 toward your tax debt.
Before you enter into any kind of payment agreement, be sure you can pay that amount every month, on time.
Second: Choose the payment option that fits your situation
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 cannot 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 is not a formal payment option, so there is no application and no fee, but interest and any penalties will continue to accrue until the tax debt is paid in full.
If you need to make monthly payments to pay off the debt
You can ask for an Installment Agreement, which sets up a fixed monthly payment. This is a formal agreement with the IRS, and involves an application process and some 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 Compromise, you must submit an application, 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 cannot make any sort of payment now
The IRS understands there may be times when someone can’t pay a tax debt due to their current financial situation. If the IRS agrees that you cannot pay your taxes and also pay your reasonable living expenses, it may place your account in a status called Currently Not Collectible. The IRS will not seek to collect payment from you while your account is in Currently Not Collectible status, but the debt does not go away, and penalties and interest will continue to grow.
How can Legal Aid Service of Collier County (LAS) help?
LAS provide Controversy Resolution to income-eligible taxpayer of Collier County. To be eligible the amount in controversy must NOT exceed $50,000 for any taxable year and your current income cannot exceed 250% of federal poverty guideline.
To find out if you are eligible, call us at
- Naples Office (239) 775-4455
- Immokalee Office (239) 657-7442
Updated: November 16, 2017