If you've got an IRS letter on your desk right now, you have a decision to make, and the clock matters. I'm Darrin Mish. I've spent 32 years helping people with exactly this kind of situation. Here's what you should do.
Tax attorney Darrin Mish put this one-page guide together from official sources. Save it, print it or share it with someone who needs it.
What the infographic says
Can't pay? Three IRS options How the IRS describes each option and who it fits.
Payment plan (installment agreement)
- What it is: An agreement with the IRS to pay what you owe over an extended time.
- Who it fits: People who can pay the full balance within that extended time.
- Short term: Pay in 180 days or less.
- Long term: Pay in monthly payments.
- Keep in mind: Penalties and interest keep adding up until the balance is paid in full.
Offer in compromise
- What it is: A way to settle your tax debt for less than the full amount you owe.
- Who it fits: People who can't pay in full, or for whom paying would cause financial hardship.
- The IRS looks at: Your income, expenses and the equity in your assets.
- To qualify: File all required returns, make required estimated payments, and not be in an open bankruptcy.
- Keep in mind: The IRS generally won't accept an offer if you can pay in full through a payment plan or asset equity.
Currently Not Collectible
- What it is: The IRS temporarily delays most collection until your finances improve.
- Who it fits: People who cannot pay because of financial hardship.
- The IRS may ask: For financial forms and proof of income, living expenses, bank accounts and assets.
- Keep in mind: You still owe the full amount. Penalties and interest continue. The IRS may file a lien and will apply your refunds to the debt.
Sources
- https://www.irs.gov/payments/payment-plans-installment-agreements
- https://www.irs.gov/payments/offer-in-compromise
- https://www.irs.gov/businesses/small-businesses-self-employed/temporarily-delay-the-collection-process
Checked October 2026.
If you have a question about your own situation, call tax attorney Darrin Mish at (813) 229-7100.
Attorney advertising. General information, not legal advice. Every case is different; follow the instructions and deadlines on your own notice.