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If I am unable to pay my IRS tax bill, what options do I have? If you are unable to pay your IRS tax bill, there are several options available to help you manage your tax debt: Payment Plans The IRS offers payment plans that allow you to pay your tax debt over time. There are two main types of payment plans: Short-Term Payment Plan: This plan allows you to pay your tax debt in full within 120 days. There is no fee for setting up a short-term payment plan, but interest and penalties will continue to accrue until the balance is paid in full. Long-Term Payment Plan (Installment Agreement): This plan allows you to pay your tax debt in monthly installments over a longer period. There is a setup fee for this plan, and interest and penalties will continue to accrue until the balance is paid in full. Offer in Compromise An Offer in Compromise (OIC) is an agreement between you and the IRS to settle your tax debt for less than the full amount you owe. The IRS will consider your ability to pay, income, expenses, and asset equity before accepting an OIC. This option is generally available to taxpayers who cannot pay their full tax liability or if doing so would create a financial hardship. Currently Not Collectible Status If you are experiencing financial hardship and cannot pay your tax debt, you may qualify for Currently Not Collectible (CNC) status. This means the IRS temporarily suspends collection activities until your financial situation improves. Interest and penalties will continue to accrue, and the IRS may review your financial situation periodically. Penalty Relief You may be eligible for penalty relief if you have a reasonable cause for not paying your taxes on time. Reasonable causes can include serious illness, natural disasters, or other circumstances beyond your control. You can request penalty relief by providing a written explanation to the IRS. Conclusion If you are unable to pay your IRS tax bill, it's important to explore these options and choose the one that best fits your financial situation. Consulting with a tax professional can help you navigate these options and ensure you are making the best decision for your circumstances.