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By Aliss Higham
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As the tax deadline approaches on April 15, many Americans could find themselves owing thousands of dollars to the federal government.
Finding yourself unable to pay a tax bill in full can be stressful, but there are options available to help manage the debt and avoid escalating penalties.
The Internal Revenue Service (IRS) offers payment plans and encourages early communication, while tax professionals warn that ignoring the issue can lead to more serious consequences.
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Payment Plans and Options
For taxpayers unable to settle their bill on or before the deadline, the IRS provides online payment plans that allow balances to be paid over time. These include short-term arrangements that last 120 days or less, for those owing under $100,000, and longer-term installment agreements for balances below $50,000, which are paid monthly.
Applications can be completed online, with faster processing and immediate confirmation of approval. In some cases, a setup fee may apply, depending on income. Taxpayers who already have a payment plan may also be able to adjust details such as payment dates, amounts or banking information through the same system.
Those who do not qualify for an online plan can still request an installment agreement by submitting Form 9465.
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Expert Advice
Tax professionals emphasize the importance of addressing the issue as soon as possible. John Werlhof, a principal at tax firm CLA, advises taxpayers to first ensure the bill itself is accurate.
"Start by working with a tax adviser to confirm whether the tax bill is correct. In some cases, deductions or credits may be available to reduce the tax bill, or the IRS may have improperly adjusted the tax return," Werlhof told Newsweek.
Even if full payment is not possible, filing on time remains critical. "You should file the tax return on time even if full payment is not possible to avoid late filing penalties. Paying what you can at filing will reduce penalties and interest. You should then promptly request a formal payment plan with the IRS," he added.
"Ignoring IRS notices can lead to escalated collection efforts, such as bank levies. In contrast, if you engage with the IRS and request additional time to pay, the IRS is more likely to work with you," he said.
What Happens If You Don't Pay?
Failing to meet tax obligations can lead to mounting costs. The IRS imposes separate penalties for not filing a return and for not paying what is owed.
For late filing, taxpayers may face a charge of 5 percent of the unpaid tax per month, up to a maximum of 25 percent. If a return is more than 60 days overdue, a minimum penalty applies—$525 for 2026 filings or 100 percent of the unpaid tax, whichever is lower.
Even those who file on time but do not pay in full are subject to penalties. The IRS typically charges 0.5 percent of the unpaid balance per month, which can rise to 1 percent if payment is not made within 10 days of receiving a final "intent to levy" notice.
Beyond penalties and interest, continued nonpayment can result in more serious actions, including liens against property or the seizure of assets, such as bank accounts and wages.
Update 3/20/26, 10:33 a.m. ET: This article has been updated to reflect the name of tax firm CLA.
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