Cannot Pay IRS Tax Bill
If you are one of the many taxpayers who
cannot pay the IRS tax bill for the taxes owed, don't panic. A
taxpayer who cannot pay his or her tax payment can set up an
agreement with the IRS just as he or she can set up an
agreement with any creditors. Yes there will be fees and tax
penalty, but the IRS fees and IRS penalties are much less than
the fees and penalties commercial banks charge their customers.
You will not find outrageous interest rates and hefty penalties
on your IRS tax bill if you cannot pay the tax payment.
Setting up a payment plan with Uncle
If by the time you file your tax return, you
owe the IRS money and you did not send in the full amount of
tax payment, then you will get an IRS tax bill detailing how
much tax you owe as well as interest and tax penalty. The less
you owe, the less interest and penalties so try to pay as much
as possible. However, if you really cannot pay your entire IRS
tax bill in full, there are payment plans the IRS will work out
I cannot afford to pay my taxes, should I
file my tax return anyway?
Definitely! More tax penalties are assessed
for failure to file your tax return on time so taxpayers should
file their tax returns even if they cannot afford to pay the
IRS tax bill yet.
I can only afford to pay part of my tax
bill, should I pay that small amount or should I wait to pay
the full amount?
Since penalties and fees are assessed
monthly, you should pay as much of your IRS tax bill off as
possible. Every month that you do not pay your IRS tax bill,
you will incur fees, interests and penalties. Make sure you
make your tax payments correctly using check or money order
made out to the United States Treasury with appropriate
personal details on the payments.
If the taxpayer cannot pay his or
her tax bill in full immediately, the IRS offers short-term
administrative extensions of time to pay in full from
10 to 120 days.
What are the interests and penalties for
not paying taxes in full?
When a taxpayer has an outstanding balance
of tax owed to the IRS, the balance is subject to interest and
monthly late payment penalty.
IRS installment agreement
The IRS' installment agreement allows
taxpayers with outstanding tax bills to make series of monthly
payments over time. IRS installment agreements can be from:
Direct Debit from your bank account,
Payroll Deduction from your employer, or
Payment via check or money order.