IRS payment options explained
If you owe the IRS, the main options are paying in full now through IRS.gov/payments, setting up a short-term or long-term payment plan, applying for an Offer in Compromise to settle for less than you owe, asking the IRS to temporarily delay collection, or requesting penalty relief. Each option has its own process and paperwork described on IRS.gov.
Pay now
You can pay a balance in full through IRS.gov/payments using IRS Direct Pay from a bank account, a debit or credit card (processing fees apply), or the Electronic Federal Tax Payment System (EFTPS). Paying in full stops interest and failure-to-pay penalties from adding up further.
Payment plans
If you cannot pay in full right away, the IRS offers payment plans described at IRS.gov/paymentplan. A short-term plan gives up to 180 days to pay, generally for individuals who owe less than $100,000 combined in tax, penalties, and interest. A long-term plan, also called an installment agreement, lets you make monthly payments, generally for balances under $50,000. Both can be requested online, and there is typically a setup fee for a long-term plan, though low-income taxpayers may have it reduced or waived.
Offer in Compromise
An Offer in Compromise (OIC) is an agreement that lets a taxpayer settle a tax debt for less than the full amount owed. The IRS considers a taxpayer's ability to pay, income, expenses, and asset equity in deciding whether to accept an offer. There is an application fee and the process described on IRS.gov includes a pre-qualifier tool, but not everyone who applies is accepted.
Temporarily delay collection
If paying would create financial hardship, you can ask the IRS to temporarily delay collection, sometimes called Currently Not Collectible (CNC) status. This pauses most collection activity, but the debt is not erased, and interest and penalties continue to accrue while the account is in this status. The IRS may ask for financial information, such as Form 433-F, to decide whether to approve this.
Penalty relief
The IRS can sometimes reduce or remove penalties for reasons like reasonable cause, or for a first-time penalty if you have a clean compliance history. Penalty relief does not remove the underlying tax owed or interest, and it is requested separately from a payment plan.
How OweRight fits in
Scanning your IRS letter in the OweRight iPhone app to understand what it says is free. If you owe more than you can pay right now and want to see how these options could apply to your situation, Resolution Options is $79.99 per letter, one time, with no subscription.
How OweRight helps
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Frequently asked questions
What are my options if I owe the IRS and cannot pay in full?
The main options described on IRS.gov are a short-term or long-term payment plan, an Offer in Compromise, temporarily delaying collection, and penalty relief. The right option depends on your financial situation and how much you owe.
What is the difference between a short-term and long-term payment plan?
A short-term plan gives up to 180 days to pay and is generally for people who owe less than $100,000 combined. A long-term plan, or installment agreement, allows monthly payments over a longer period, generally for balances under $50,000.
What is an Offer in Compromise?
An Offer in Compromise is an agreement that can let a taxpayer settle a tax debt for less than the full amount owed. The IRS reviews the taxpayer's ability to pay, income, expenses, and assets before deciding whether to accept.
Does temporarily delaying collection erase the debt?
No. Currently Not Collectible status pauses most collection activity, but the debt remains, and interest and penalties keep adding up while the account is in that status.
Can the IRS remove penalties?
The IRS can sometimes reduce or remove certain penalties for reasons like reasonable cause or a clean compliance history, but this is separate from the tax owed and from a payment plan.
Where do I set up a payment plan with the IRS?
Payment plans can be requested through IRS.gov/paymentplan. Paying a balance in full can be done through IRS.gov/payments.
Related letters
- CP14: IRS Notice CP14
- CP501: IRS Notice CP501
- CP503: IRS Notice CP503
- CP504: IRS Notice CP504
- LT11: IRS Letter LT11
Sources
- IRS: Make a payment
- IRS: Payment plans and installment agreements
- IRS: Offer in Compromise
- IRS: Temporarily delay the collection process
- IRS: Penalty relief
Last reviewed: October 12, 2026
OweRight is not affiliated with the IRS. This is not tax or legal advice.