What to Do If You Owe the IRS But Can’t Pay

Tax Relief Now
May 18
2 min read

If you’ve received a letter from the IRS or you already know you owe taxes — but you’re unable to pay — take a breath. You are not alone, and more importantly, you have options.

At Tax Relief Now, we help people every day who are overwhelmed, confused, and unsure of what to do next. Here’s a breakdown of what to do if you're in this situation.

Step 1: Don’t Ignore It

Ignoring IRS notices only makes things worse. Penalties, interest, and collection activity (like wage garnishments or bank levies) can escalate quickly.

Tip: Open the letter, know what the IRS is asking for, and make note of any deadlines.

Step 2: Get Clear on What You Owe

Sometimes the amount the IRS says you owe is inflated or based on missing returns. Before you make a payment or panic, it’s important to review your IRS transcripts and ensure everything is accurate.

This is the first thing we do during our discovery process — we pull your records, analyze your standing, and check for any errors or unfiled returns.

Step 3: Explore Your Resolution Options

The IRS offers several ways to resolve your balance:

Installment Agreement (IA): A monthly payment plan
Currently Not Collectible (CNC): If you can’t pay anything right now
Offer in Compromise (OIC): Settle your debt for less than what you owe (if you qualify)
Penalty Abatement: If you have a legitimate reason for falling behind

We’ll help determine which option is best based on your income, expenses, and financial profile.

Step 4: File Any Missing Returns

If you have unfiled years, the IRS may file for you — and their numbers won’t include deductions or credits.We’ll help you get compliant quickly and professionally.

Step 5: Work With a Trusted Professional

Tax debt is stressful, but you don’t have to figure it out alone. We act on your behalf, speak to the IRS for you, and develop a real plan — without judgment.