What should I do if I owe money to the IRS?

We are aware that paying back taxes can be a hassle, particularly if you don’t have a CPA or tax professional to guide you. Most of the time, if you don’t pay your taxes, you’ll merely be subject to interest or penalties rather than being imprisoned for tax evasion. Even if you are unable to make a payment the following day, you should still file your return or at the very least request a six-month extension. Then, we can assist you in selecting from among your available payment choices.

How do the IRS Payment Plans function?

An arrangement with the IRS to pay back taxes over a long period of time is known as a payment plan. If you meet the requirements, one of the choices you can apply for is an online payment plan. If your payment plan has been approved, you will be notified right away after submitting your application.

You have the choice of making a single payment (yep, the less enjoyable option), a short-term payment plan (paying within 180 days or less), or a long-term payment plan (an installment agreement – paying monthly). It’s crucial to understand that we can assist you in choosing the payment method that best suits your needs based on your individual tax position.

Do IRS debts ever cease to exist?

Fortunately, owing money to the IRS won’t follow you around forever. Generally speaking, it is advisable to handle IRS issues before they worsen. IRS collections are subject to a ten-year statute of limitations. As a result, the IRS has ten years from the date of assessment to try to collect any unpaid taxes you may have. The IRS will no longer be able to collect after ten years, except a few significant exceptions. If the Collection Statute Expiration Date is approaching, the IRS may take aggressive action to collect as much money as possible from you before the deadline.

Keep in mind that the ten-year statute of limitations starts to run on the day of the tax assessment. In the event that you do not make a full payment when you file your tax return, you will receive a written notice of the amount you owe. The ten-year limitations period begins on the date on this notification. If you failed to submit a tax return, the IRS may do so on your behalf and issue a deficiency assessment, which begins the subsequent year.

I owe the IRS money. Can I submit taxes?

If you are unsure whether to submit your taxes or not because you cannot pay the entire amount owing at the time of filing, we completely understand. However, it’s crucial to remember that whether you intend to pay taxes or not, filing them on time is always the wisest course of action. One of the payment plans the IRS offers should be taken into consideration if, for any reason, you are unable to make your required payments. These consist of:

  • A promise to pay during the following ten days.
  • A quick repayment schedule with 11–120 days for payment.
  • An installment arrangement that calls for regular payments of the outstanding debt.

Businesses can apply online if they have debts of $25,000 or less from the current and previous calendar years and can pay it off in 24 monthly installments.

How much time do you have to pay back taxes to the IRS?

As was already indicated, Uncle Sam provides payment plans for tax payments. He doesn’t want to have to pursue you to recover the debt. In addition to the payment plans I discussed above, you can submit Form 9465 to your neighborhood IRS office to find out what kind of plan you are eligible for.

Taxpayers who qualify may be given up to 72 months to pay off their debt in full. It’s critical to remember that until the balance is paid off, interest and penalties will keep accruing. The IRS may apply any refunds you are due in any later tax years toward the remainder of what you owe if you are due one.

What occurs if you don’t give the IRS your entire payment?

If you are unable to pay your tax obligation, you might be asking whether you still need to file your return. But you should be aware that this is the most crucial element. To avoid penalties, you must file your return or request an extension. Every month that you owe taxes, the IRS automatically tacks on a 5% failure to file penalty, up to a maximum of 25% of unpaid tax plus interest on the amount until you pay it in full. Please be aware that this is distinct from interest fees for late or nonpayment. Even if you do not pay on time, you can still avoid some fees by filing on time!

In addition to penalties and interest, the IRS may also impose various sanctions to make you regret failing to pay your taxes. such by seizing your property (personal or company), garnishing your salary, or even canceling your passport.

Fortunately, there are a few tools available that could be useful to you, such the online payment plan that enables you to pay off an outstanding sum gradually. You will be informed if your payment plan has been approved when your application has been submitted. Even if the new tax hasn’t been calculated yet, requests made with this resource are handled more promptly than those made with electronically filed tax returns.

Options for online payment plans include:

  • Short-term plan: The payment period is 120 days or less, and the total amount payable, including tax, penalties, and interest, should not exceed $100,000.
  • Long-term payment plan: The repayment period is longer than 120 days, payments are made monthly, and the total amount owed—including tax, penalties, and interest—is less than $50,000.


Filling out your taxes may be complex and generally unpleasant, which is made worse if you are required to pay more taxes than you are able to. The worst thing you can do in this circumstance, as previously said, is to fail to file a return in order to avoid payment. You will have an additional six months to finish your return if you request a delay. You won’t have to worry about the failure to file penalty if you file an extension before the April tax filing deadline. On any unpaid taxes, you can still be responsible for a failure to pay penalty (up to a maximum of 25% of the outstanding total).

Consider with a financial counselor at Molen & Associates if you require assistance with your taxes or have any other type of financial inquiry. Call us right away; we’ll be pleased to assist you and guide you through any tax scenario.

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