What If You Can’t Pay Your Taxes In Full On or Before April 18?

If you can’t pay your federal income tax debt immediately and in full, you can make monthly payments through an alternative payment agreement with the IRS. You can also ask for some additional time to make your payment. Based on your circumstances, the IRS may grant you a short additional time to pay your tax in full. Taxpayers who request and are granted an additional 60 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time.

Another option is to ask the IRS to temporarily delay the collection process. If your request is found with merit, the agency may report your account as currently not collectible and temporarily delay collection until your financial condition improves. Being currently not collectible does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time. Prior to approving your request to delay collection, you will be asked to complete a Collection Information Statement (Form 433-F, Form 433-A or Form 433-B) and provide proof of your financial status. During a temporary delay, your debt will increase because penalties and interest are charged until you pay the full amount.

If you’re eligible, you you can make monthly payments through an installment agreement. To be eligible, individuals must owe $50,000 or less in combined individual income tax, penalties and interest, and have filed all required returns. For businesses, they must owe $25,000 or less in payroll taxes and have filed all required returns. You can apply via the IRS’ Online Payment Agreement (OPA) web page or by completing and mailing Form 9465 (Installment Agreement Request) and Form 433-F (Collection Information Statement).

The OPA application allows taxpayers to self-qualify, apply for, and receive immediate notification of approval. This online facility provides you with a simple and convenient way to establish an installment agreement that eliminates the need for personal interaction with IRS and reduces paper processing. Once approved, your future refunds will be applied to your tax debt until it is paid in full.  And even if your refund will be applied to your account balance, you will be expected to make all scheduled installment monthly payments. To avoid penalties from default, at least your minimum monthly payment when due. If your agreement does go into default, you may be required to pay a reinstatement fee. Penalties and interest will continue to accrue until your balance is paid in full.

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