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What are My Options if I Cannot Pay My Taxes in Full?


As a result of the changes made by the Tax Cuts and Jobs Act (TCJA), which went into effect last year, many taxpayers have struggled to determine how much they owe in taxes, whether they qualify for a refund, and who is eligible for a waiver of the tax penalties that come with a failure to pay one’s taxes in full. Fortunately, there are options for taxpayers who are unable to meet their full tax obligation, so if you don’t believe that you will be able to pay your taxes in full, it is important to speak with an experienced Florida tax attorney who is well-versed in these options and can ensure that you are not unfairly penalized by the IRS.

Penalty Waiver  

In an effort to help taxpayers adjust to the changes made by the TCJA, the IRS recently adjusted the penalty waiver that applies to those who accidentally withhold too little from their paychecks. Based on these adjustments, taxpayers can now avoid a penalty for failing to pay all of their taxes as long as they paid at least 85 percent of their total liability. In prior years, this threshold was higher, at 90 percent, leaving many taxpayers to pay hefty penalties and fines.

Payment Options 

Even taxpayers who cannot pay their full tax liability by April 15th are still encouraged to file their tax returns and as much of the payment as they can cover via IRS Direct Pay, debit or credit card payment, check, money orders, or cash payment. Taxpayers in this situation can then choose from among a variety of payment options to cover their remaining balance. Potential payment plans include:

  • The Online Payment Agreement, which is one possible option for taxpayers who owe $50,000 or less in income tax, interest, and penalties and businesses that owe no more than $25,000 in payroll taxes and who have filed all of their tax returns as required;
  • Installment agreements, which are paid via direct deposit from a bank account or payroll deduction and are available to taxpayers who do not qualify for a payment agreement;
  • Delaying collection until a taxpayer’s financial condition has improved;
  • Offers in Compromise, which allow certain qualifying taxpayers to settle their tax liability for less than what they actually owe in the form of a lump sum cash payment, or in a series of periodic payments; and
  • Obtaining a loan, which can help taxpayers pay off their remaining tax deb without incurring excessive interest and penalties that would otherwise be charged by the IRS.

Not all taxpayers qualify for these payment options, so if you are unable to pay your tax bill in full, you should speak with an attorney as soon as possible about whether you are eligible for any of these payment plans.

Call Our Office Today to Discover How an Experienced Tax Attorney Can Help You  

If you are unable to meet your tax obligations, please call 386-490-9949 and a member of our legal team will help you schedule a free one-on-one consultation with dedicated Florida tax attorney Ronald Cutler, P.A.