What If You Can’t Afford to Pay the IRS? Here's What to Do

If you're behind on taxes and the IRS says you owe more than you can afford — take a deep breath.

You might feel stuck. Maybe you’ve avoided opening letters or making calls because you don’t have the money. But not being able to pay doesn’t mean you’re out of options.

The IRS actually has programs in place for taxpayers who are experiencing financial hardship — you just have to know how to use them.

First — What Happens If You Can’t Pay the IRS?

Here’s the reality:

• The IRS will charge penalties and daily interest.

• They’ll keep sending notices (and may file a lien or issue a levy if ignored).

• They won’t go away — but they will work with you if you communicate early.

Ignoring the debt leads to garnishments, bank levies, and liens. But if you’re proactive, you can avoid all of that — even if your bank account says otherwise.

5 Real Options If You Can’t Afford to Pay the IRS

✅ 1. Set Up a Payment Plan

You don’t have to pay it all at once. Many taxpayers qualify for monthly payment plans, and in some cases, the setup can be done online.

Bonus: Once the plan is active, collections stop.

✅ 2. Request Currently Not Collectible (CNC) Status

If paying the IRS would leave you unable to cover basic needs (housing, food, medical), you may qualify for CNC status — which puts collections on hold temporarily.

No garnishments, no levies — just breathing room.

✅ 3. Apply for an Offer in Compromise

In certain cases, you may be eligible to settle your tax debt for less than you owe. This is called an Offer in Compromise, and it’s one of the most powerful relief options available — but it does require proof that you can’t pay in full.

✅ 4. Ask for Penalty Relief

If this is your first time falling behind — or you had a valid reason (illness, job loss, natural disaster) — you may qualify for penalty abatement, which could knock thousands off your bill.

✅ 5. Work With a Tax Professional

This is one of the most overlooked options — but it changes everything. A tax resolution pro can speak to the IRS for you, protect your assets, and make sure you don’t agree to something that hurts you in the long run.

What Not to Do

❌ Don’t ignore the letters

❌ Don’t drain your retirement to pay a lump sum out of fear

❌ Don’t agree to a payment plan you know you can’t maintain

❌ Don’t assume the IRS will always say no — they have hardship guidelines for a reason

Final Thoughts

If you can’t afford to pay the IRS, you’re not a failure — and you’re not alone. This happens to small business owners, freelancers, parents, retirees — everyone. The IRS has options. You just have to know how and when to use them.

Book a Tax Strategy Session now and I’ll walk you through what’s possible in your exact situation — no pressure, no judgment, just solutions.