File on time even if you can’t pay in full. The penalty for not filing is generally larger than the penalty for not paying, and the IRS offers payment options.
Step 1: File your return on time
Even if you can’t pay, file by the deadline (or file an extension, remembering it doesn’t extend payment). The failure-to-file penalty is much higher than the failure-to-pay penalty. See how penalties work.
Step 2: Pay what you can
Any payment reduces penalties and interest. You can pay through IRS Direct Pay (free, from a bank account), by debit or credit card through an approved processor (a fee applies), or by other methods listed on IRS.gov.
Step 3: Choose a payment option
| Option | How it works |
|---|---|
| Short-term payment plan | Up to 180 days to pay in full; interest and penalties continue until paid. |
| Long-term installment agreement | Monthly payments over a longer period; setup fees apply, lower if you apply online or use direct debit. Interest and penalties continue. |
| Offer in compromise | Settle for less than you owe if you can’t pay the full amount and meet strict requirements; apply carefully. |
| Currently not collectible | The IRS may temporarily pause collection if payment would cause financial hardship. |
Many individuals can apply for a payment plan online through the IRS Online Payment Agreement tool, depending on how much they owe; larger balances may need additional paperwork. Interest is charged on the unpaid balance and rates change quarterly.
Step 4: Respond to IRS notices
The IRS usually sends a series of notices before it takes collection action such as a levy. Respond by the date in the notice. See the collection process and what to know about notices.
Should you use a credit card or loan?
Paying with a card or personal loan can be cheaper or costlier than IRS interest and penalties, depending on rates and fees. Compare the total cost, including the processor’s fee, before borrowing. Don’t use a high-interest product without doing the math.
Penalty relief
You may qualify for penalty relief based on reasonable cause or first-time abatement. Interest generally can’t be waived. Ask the IRS or consult a professional.
Beware of tax-debt “relief” scams
Companies that promise to settle your tax debt for pennies on the dollar for a big upfront fee are often misleading. Use IRS tools directly, or a licensed professional (CPA, enrolled agent or attorney). The Taxpayer Advocate Service and Low Income Taxpayer Clinics offer free or low-cost help if you meet income guidelines.
State tax debts
States also offer payment plans; contact your state agency. See our state guides.
Frequently asked questions
Should I file my return if I can’t pay?
Yes. File on time or request an extension; the penalty for not filing is larger than the penalty for not paying.
Can I set up an IRS payment plan online?
Many individuals can, depending on how much they owe. Use the IRS Online Payment Agreement tool.
Will the IRS waive penalties?
Possibly, for reasonable cause or first-time abatement. Interest is generally not waived.
Official sources
- IRS: Online payment agreement
- IRS Topic 202: Tax payment options
- IRS Topic 201: The collection process
- IRS Topic 653: IRS notices, penalties and interest
- Taxpayer Advocate Service
- IRS Direct Pay
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.