You filed your taxes… and now you owe.
But the real problem?
You can’t pay the balance in full.
Let me be real with you—you are not the only one in this situation. Millions of taxpayers end up here every year. And despite what it feels like, this is not the end of the road.
The IRS already knows that most people aren’t sitting on extra cash to pay a tax bill all at once. That’s exactly why they offer payment options to help you handle your tax debt without making things worse.
In this post, I’m going to walk you through 4 IRS payment options you may qualify for that can help you pay down your tax bill. Then I’ll break each one down in separate posts so you can figure out exactly which one fits your situation.
Option 1 & 2: Payment Plans (Most Common)
If you owe taxes but can afford to pay over time, this is usually where you start. There are two types of payment plans:
Short-Term Payment Plan
This option is for taxpayers who:
- Owe less than $100,000 (including penalties and interest)
With this plan:
- You get up to 180 days to pay your balance in full
- No monthly payment structure—you just need to pay it off within that timeframe
This works best if you know money is coming soon (bonus, commissions, etc.).
Long-Term Payment Plan (Installment Agreement)
This is what most people think of when they hear “payment plan.” This option is for taxpayers who:
- Owe $50,000 or less in total
With this plan:
- You can make monthly payments over time
- You may have up to 10 years to pay it off
- Payments can be set up as automatic withdrawals (which helps you stay compliant)
Just understand this part: the longer you take to pay it off, the more you’ll pay in interest, penalties, and fees. So yes—it gives you breathing room… but it’s not free. However, the good news is you can usually apply online and get approved immediately without calling the IRS.
Option 3: Offer in Compromise (Settle for Less)
If you truly can’t afford to pay your full tax debt, you may qualify to settle for less than what you owe. This is called an Offer in Compromise. But let me be clear—this is not as easy as social media makes it sound.
The IRS looks at your income, your expenses, your assets, and your ability to pay now and in the future. If they determine you’ll never realistically be able to pay the full amount, they may accept a reduced payoff. Not everyone qualifies—but it’s an option worth exploring if your situation is tight.
Option 4: Temporary Delay (Currently Not Collectible)
If paying anything right now would create a financial hardship, you may qualify to have collections temporarily paused. This is often referred to as “Currently Not Collectible” status. Here’s how it works:
- The IRS pauses collection activity
- You don’t have to make payments right now
- BUT… penalties and interest continue to grow
This is not forgiveness—it’s time. It gives you space to stabilize your finances before dealing with the debt.
Don’t Forget About Penalty Relief
On top of these options, you may also qualify for penalty relief. If you tried to comply but couldn’t due to circumstances outside your control, the IRS may remove certain penalties, reducing your total balance.
Final Thoughts
So if you owe taxes and can’t pay, ignoring the problem is what makes it worse. The IRS will start sending notices in stages—and they don’t stay the same. They get more serious over time, and your options become more limited the longer you wait.
So take action and figure out which one of the IRS payment options actually fits your situation. Take action before the IRS takes it for you.
What to Do Next
If you’re not sure which option you qualify for, or you already have tax debt and don’t know where to start, schedule a Tax Needs Consultation and let’s figure it out together.
This content is for informational purposes only and is not intended as tax advice. Every tax situation is different. You should consult with a qualified tax professional regarding your specific situation.