If you cannot pay what you owe by April
File on time anyway, pay what you can, then pick a plan. Short-term and long-term IRS payment options, offers in compromise, and what an extension does not do.
Quick answers
- What should I do if I cannot pay my taxes?
- File the return on time anyway, pay whatever you can by the deadline, then apply for a payment plan. The penalty for filing late is much larger than the penalty for paying late, and most arrangements require your returns to be filed first.
- Does an extension give me more time to pay?
- No. An extension moves only the filing date. Tax stays due on the original date, and interest and the failure-to-pay penalty generally run from there whether or not you filed an extension.
- Can the IRS settle my tax debt for less?
- Sometimes, through an offer in compromise, but the IRS says the program is not for everyone. It weighs your ability to pay, income, expenses and asset equity, and a pre-qualifier tool shows whether an offer is plausible before you spend anything.
Owing more than you have is a payment problem, not a filing problem, and the two are penalized very differently. File the return on time, pay what you can, and then choose from the arrangements the IRS publishes for the rest.
File anyway
The penalty for filing late is much larger than the penalty for paying late. They are separate charges, they run on separate rules, and not filing exposes you to both while filing exposes you to only one.
So the return goes in by April 15, 2026 whatever the bank balance says. A return filed on time with nothing attached to it puts you in the far cheaper of the two positions, and it is also the entry ticket to almost every arrangement below, because the IRS generally requires all required returns to be filed before it will agree to a plan.
Pay what you can, when it is due
Partial payment is worth making. Penalties and interest are charged on the unpaid balance, so a payment on April 15, 2026 reduces every charge that follows it, even if it clears only part of what you owe.
Pay directly from a bank account, by card, or through your IRS online account, and keep the confirmation. Do not skip a payment you can afford because it will not cover the whole bill.
Six steps when the balance is more than you have
- Finish and file the return on time, even if the balance frightens you.
- Pay whatever you can by April 15, 2026, and keep the confirmation.
- Open or sign in to your IRS online account and read the actual balance, which includes penalties and interest to date.
- Apply for a payment plan online. Most individuals qualify for the online application if the total, including penalties and interest, is under the online limit the IRS publishes.
- Set the monthly amount at a figure you will actually pay every month, not the one that clears it fastest.
- Keep filing and paying on time while the plan runs. A new balance in a later year generally puts an existing agreement in default.
Short-term plan
If you can clear the balance in up to 180 days, the short-term option is the simplest arrangement the IRS offers. There is generally no setup fee, and you apply online in a few minutes.
Penalties and interest continue to accrue until the balance is paid in full. A short-term plan is not forgiveness of anything; it is permission to take a few months without further collection action.
Long-term installment agreement
For balances that need longer, the long-term installment agreement is a monthly payment until the debt is cleared. The online application handles it for balances under the limit the IRS publishes for individuals, and the whole thing is set up without speaking to anyone.
There is a setup fee, and it is lower when you pay by direct debit from a bank account. Low-income taxpayers may have the fee reduced or waived. Again, penalties and interest keep running on the balance while the agreement runs, so the total paid is more than the balance you started with.
Direct debit is worth taking for a second reason beyond the fee: missed payments are the usual way an agreement defaults, and an automatic payment does not get forgotten.
Offer in compromise
An offer in compromise settles a tax debt for less than the full amount owed. The IRS generally accepts one when the amount offered represents the most it can expect to collect within a reasonable period, weighing your ability to pay, income, expenses and asset equity.
The requirements are real. You must have filed all required returns and made required estimated payments, you must not be in an open bankruptcy proceeding, and the application carries a non-refundable fee and an initial payment. The IRS publishes a pre-qualifier tool that tells you whether an offer is plausible before you spend anything.
The IRS says plainly that the program is not for everyone. Advertisements promising to settle any debt for a fraction of it are describing an outcome that the arithmetic above will not produce for most people, and the IRS suggests checking the qualifications of any professional you hire for this.
Currently not collectible
If paying anything would leave you unable to cover basic living expenses, you can ask the IRS to report the account as currently not collectible. Collection activity generally pauses while that status holds.
It is a pause rather than an ending. Interest and penalties continue, the IRS reviews the position periodically and can resume collection when your circumstances change, and a lien may still be filed. It exists for genuine hardship, and it is a conversation to have with a preparer who can see your full picture rather than one to guess at.
When a notice has already arrived
If a balance-due notice is already on the table, the notice and the plan are the same problem. Read the notice number and the response date first, then set up the arrangement before that date rather than after it.