What if You Can't Pay IRS Taxes Owed in Full?

When you owe the IRS money but cannot pay in full you have other options. In other words, the IRS knows that not everybody can pay their tax liability in full. For this reason, they make it easy to find something else that works. Two of the most common options for paying the IRS, if you cannot afford to do so in full, are an installment agreement or settlement.

Most people are best off first looking into an installment agreement. The reason for this is that the IRS is not willing to reach a settlement with most people. You need to have a very good reason to take advantage of a settlement, offer in compromise, etc. To make things easy on yourself, consider an installment agreement. The IRS offers this type of agreement because it allows you to pay your tax liability over the course of several months if you do not have the cash to do so at the same time. Setting up an installment agreement is easy enough if you begin to work with the IRS as soon as this situation arises.

What about a partial payment installment agreement? With this arrangement you still make monthly payments to the IRS, but they do not add up to the total amount due. After you make all the proper payments the remaining tax debt is forgiven.

For many, an offer in compromise sounds like the best deal but there are many reasons why this may not be something you can take advantage of. Simply put, an offer in compromise is a way to settle your tax debt for less than what you owe. The IRS has the right to either accept your offer in compromise, if they feel that they will never get paid in full, or deny you if they feel that you have the ability to pay the total debt.

If you cannot pay the IRS in full the worst thing you can do is forget about this because you will be charged the failure to pay penalty along with other consequences if taxes remain unpaid for a longer period of time. You need to pay what you owe, and you can do so through an installment agreement, partial payment installment agreement, or an offer in compromise. Consider all three of these options after you decide that paying your liability in full is out of the question.

More options for paying back taxes owed

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Back Taxes Frequently Asked Questions
Common questions taxpayers have about back taxes and the different problems and situations that arise from not filing.

Tax Settlement Methods
What a tax settlement is, how it works, how to settle for less, and how to make an agreement if you don't qualify.

Tax Payment Plans
Methods of paying back your taxes back in monthly increments. Different methods exist for people of different financial situations.

Tax Settlement Help
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Payment Plan Help
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