Struggling to Pay the IRS? Here’s Your Best Plan to Avoid Penalties & Stay on Track!

During the tax season of 2025, millions of U.S. citizens will be required to file their 2024 tax returns by the due date. Otherwise, they can get penalized by the IRS. But if you cannot pay the entire tax amount, then no need to panic. You do have some solutions at hand with the help of which you can fix the issue.

Payment options available with IRS

IRS offers different payment modes so that taxpayers can pay tax according to their convenience. If you have already saved money to pay tax and can pay, then you can use Direct Pay. In this facility, you can pay directly from your bank account.

Besides this, taxpayers can also pay via credit card, debit card, and digital wallet through IRS. But charges might be applied for these ways.

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What if you need more time to file taxes?

If you are unable to pay the entire tax amount on time, the IRS offers you the choice of applying for a Payment Plan. Both individual taxpayers and businesses can get these payment plans. But these plans might come with some fees, which is a drawback.

Even with this, it is advisable to notify the IRS ahead of time that you cannot pay the total tax. This may prevent penalties and further charges.

IRS Common Payment Plans

The IRS has various payment plans available, including:

1. Simple Plan – for limited amounts of tax due.
2. Streamlined Plan – simple payment plan with no further paperwork.
3. In-Business Trust Fund Express Plan – for small firms.
4. Guaranteed Payment Plan – For certain conditions.
5. Partial Payment Installment Agreement – For individuals who cannot pay the entire tax and need to pay in installments.

Offer in Compromise – Are you eligible for it?

In certain situations, taxpayers are also eligible for the Offer in Compromise (OIC) program. Through this program, the IRS can provide you with an option to pay your tax debt for less. But for this, the IRS will first make sure that you are really not in a position to pay the entire tax and if you pay it, it will cause a serious effect on your financial condition.

The IRS will take the following into consideration to decide whether you qualify for an Offer in Compromise:

• Your overall tax burden
• Your income
• Your expenses at present
• Your equity in assets

When will you be approved?

The IRS will typically approve an Offer in Compromise if the amount you are offering is close to the maximum possible recovery amount the IRS can expect to receive over a certain period of time. It’s important to note that this is a last resort, so look into other payment plans before considering it.

You can determine whether you qualify for an Offer in Compromise by going to the official website of the IRS: https://www.irs.gov/taxtopics/tc202

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Conclusion

If you cannot pay the entire tax, the first thing is to notify the IRS on time and find out about the payment plans they have. The IRS has many payment options available, including Direct Pay, Installment Plans, and Offer in Compromise, which can assist taxpayers in remaining financially secure.

Therefore, do not overlook any tax issue and act by identifying the most appropriate solution for you. This may save you from further interest, penalties, and legal issues and maintain your financial status healthier.

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