Tax Relief Services

IRS Back Taxes Help: Every Option the IRS Lists, in the Order That Costs Least

Updated September 6, 2026

By Angeline Balsitis, EA · Reviewed by Melissa Ly, Chief Tax Officer

Owing the IRS is a solved problem in the sense that the IRS publishes every route out of it. What it does not publish is which route fits you, and the order in which they cost more. This page lays out the options exactly as the IRS lists them and adds the one thing its pages leave out: the sequence.

First, the two penalties, and why filing comes before paying

The IRS's payment plan page states the rule everyone should read before deciding what to do. If you cannot pay the tax you owe by the original due date, the balance is subject to interest and a monthly late-payment penalty. There is also a penalty for failure to file a return, so you should file timely even if you cannot pay the balance in full. And: it is always in your best interest to pay in full as soon as you can to minimise the additional charges.

So a taxpayer with unfiled years has two problems and the filing one is the more expensive. Our unfiled tax returns page covers getting those in, and nothing on this page works on an account with returns missing; the IRS will not set up a plan on one. The general rules are on the IRS's payment plans page and its what if I can't pay my taxes page.

Option one: pay it, or pay it within 120 days

The IRS's page on not being able to pay opens with the online plans. A short-term payment plan is a period of 120 days or less, for a total owed under $100,000 in combined tax, penalties and interest. The IRS says you receive immediate notification of approval online, and that online plans are processed more quickly than requests submitted with a return. The plans page adds that a short-term plan carries no user fee.

For a balance you can clear inside four months, this is the whole answer. Interest and the late-payment penalty run until it is paid, and the IRS's advice to pay as much as you can as soon as you can applies. No firm is needed for this, and we will say so.

Option two: a long-term installment agreement

The IRS's long-term online plan is for a period longer than 120 days, paid monthly, where the amount owed is $50,000 or less in combined tax, penalties and interest. A setup fee may apply depending on income. If you do not qualify online, the IRS says you may request an agreement on Form 9465, and it describes what happens when you do: with certain exceptions, the IRS is generally prohibited from levying while an installment agreement request is pending, and the collection period is suspended while it is reviewed. If the request is rejected the collection period is suspended for a further 30 days, and a timely appeal of a rejection suspends it until the decision is final.

Above the online limits, or where the payment the IRS wants is more than you can carry, the IRS's collection page lists the forms it uses to find out what you can pay: Form 433-A for wage earners and the self-employed, 433-B for businesses, 433-F, and the Collection Financial Standards it applies to the expense section. That is where a plan becomes a negotiation. Our IRS payment plans page covers the types, the payment plan calculator shows a monthly figure, and where the balance cannot be cleared before the collection deadline at all, a partial payment installment agreement is the IRS's own answer.

Option three: temporary delay for hardship

The IRS's collection page lists, among the options when you cannot fully pay, a temporary delay when you are unable to pay. This is the status the IRS's notice pages describe as temporarily delaying collection until your situation improves. It stops enforcement. It does not stop interest, and the IRS's pages are consistent about that. It is shown with the same financial statement forms as a plan, and it suits the taxpayer whose honest numbers leave nothing for the IRS. Our currently not collectible page covers what the IRS wants to see.

Option four: an offer in compromise

The IRS lists the offer in compromise alongside plans and delay. It is a request to settle for less than the full balance, based on what the IRS could collect from your income and assets over the time it has left, and it is document-heavy. The IRS provides a Pre-Qualifier Tool for it, which is a fair first filter. Our Offer in Compromise page is direct about who it fits, and the comparison with a plan is in payment plan vs offer in compromise. Two things it is not: a discount available on request, and a route for a taxpayer who could pay through a plan.

What the IRS does if none of that happens

The IRS's collection page lists the enforced actions under the heading of what it can do if you will not file or pay: a federal tax lien, a levy, selling your property, the Federal Payment Levy Program, the trust fund recovery penalty for business owners, and revocation or denial of a passport. Each of those has its own page on this site: liens, levies and seizure, the trust fund penalty, and passport certification.

They arrive in a sequence of notices, the CP14 first and the LT11 last, and every option above is cheaper at the CP14 than at the LT11. That is the sequence the IRS's pages do not spell out and the one that decides most outcomes.

What Clarity does with back taxes

We start by finding out what you actually owe, which is not always what the notices say. The transcript for each year shows the assessment, the payments, the penalties and interest, and the date the IRS's time to collect runs out; the collection statute calculator estimates that last one. Older years sometimes have less time left than anyone assumed, and a balance the IRS has under a year to collect is a different negotiation from one with nine.

• We verify every year and identify penalties that may be removable, per our penalty abatement page.
• We file what is missing, because nothing else can start until that is done.
• We match you to the option your numbers support, on the IRS's own forms, and we present it with the documentation that makes it acceptable.
• We keep you out of the enforced list by getting a status on the account before the final notice, and we take the contact under a power of attorney.

The investigation fee is $495 for an individual and $695 for a business. It covers the transcript pull for every year, the balance and deadline review, and a written plan, and it comes with a 15-day money-back policy from the date you sign. You have the written agreement before anything is charged.

The hard part, stated plainly

The hard part is that the cheapest option is always the one available earliest, and back taxes are by definition a problem that has been waiting. Every month of waiting adds interest and penalty, closes off the online plans as the balance crosses their limits, and moves the account one notice closer to enforcement. We cannot undo the waiting. We can make sure the next month is not another one.

The second hard part is that the IRS's options are honest about what they cost and people often are not honest with themselves about what they can pay. A plan built on optimism defaults. A hardship claim that leaves out income is denied. The financial statement is the whole case, and it works when it is true.

When you do not need anyone

If the balance is under the online limits, your returns are filed, and you can clear it inside 120 days or on the IRS's long-term terms, the IRS's online tool sets it up in minutes with no professional and no fee to us. That is most people with a single year's balance, and we would rather tell you that than take the fee.

Where a review earns its fee: several years are involved, returns are unfiled, the balance is above the online limits or above what you can carry, a business or payroll balance is part of it, a lien or levy notice has arrived, or the collection deadline on an old year is close enough to matter. Those are the cases where the transcript and the sequence change the answer.

IRS Back Taxes Questions, Answered

Results vary based on individual facts and circumstances. Not every taxpayer qualifies for a payment plan, hardship status, penalty relief or an offer in compromise, and no specific outcome is guaranteed. This page is general information about resolving IRS back taxes, not tax or legal advice.

Related Services: IRS Payment Plans · Unfiled Tax Returns · Currently Not Collectible · Offer in Compromise · or return to All Tax Relief Services.

“There's also a penalty for failure to file a tax return, so you should file timely even if you can't pay your balance in full. It's always in your best interest to pay in full as soon as you can to minimize the additional charges.”

— IRS, Payment plans; installment agreements

The passage quoted above is from IRS, Payment plans; installment agreements.