What If I Can't Pay the Taxes I Owe the IRS in Full?

If you are unable to pay the taxes that you owe the IRS, rest assured that your situation is not hopeless. Because the IRS understands that it is not possible for everyone to pay their tax liability in full, they provide alternate tax settlement solutions, which include requesting an installment agreement or submitting an offer in compromise.

Since the IRS is unwilling to approve offers in compromise submitted by the majority of delinquent taxpayers, the more suitable option for most people is to set up an installment agreement. The IRS offers installment agreements to allow you to pay off your tax liability over the course of several months if you do not have the cash to do so all at one time. Setting up an installment agreement is easy enough if you begin working with the IRS as soon right away.

You may also want to setting up a partial payment installment agreement, through which you still make monthly payments to the IRS, but the payments do not add up to the total amount due. Once the agreed-upon amount has been paid through these installments, the remaining tax debt is forgiven.

On the other hand, an offer in compromise seems like the most ideal option for many, but there are a number of reasons why this may not be something you are eligible to take advantage of. An offer in compromise is a way to settle your tax debt for less than what you owe. The IRS has the power to accept your offer in compromise if they believe that you will never be able to pay the full amount of your tax debt, or deny your request if they believe that you are able to pay back your total debt. You must have a valid reason to take advantage of an offer in compromise in order for it to be accepted. To make things easier on yourself, consider setting up an installment agreement instead.

The first step in paying back taxes owed to the IRS is to acknowledge your situation and take steps to resolve it as soon as possible, since you will be charged the failure to pay penalty - in addition to accruing interest and suffering multiple other consequences - if taxes remain unpaid any longer. Consider settling your tax debt through an installment agreement or an offer in compromise if you determine that paying your liability in full is absolutely impossible.

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

Tax Settlement Methods
If you cannot pay the taxes you owe in full, there are a number of options available to resolve your outstanding tax liability and prevent further accrual of interest and penalties.

Tax Payment Plans
The IRS offers payment plans that allow taxpayers to pay off the taxes they owe in a given period of time, depending on the circumstances.

Tax Settlement Help
Our tax team is comprised of tax attorneys, tax lawyers, CPAs and IRS agents who can help you find the best tax settlement method for your individual situation.

Payment Plan Help
There are several methods of paying past-due taxes and dissolving your tax liability. Our tax team can help you determine the best approach for you.