Learning that you have an unexpected tax bill can be particularly stressful. Maybe you just prepared your annual income tax return or you got a tax collection notice in the mail from the IRS. Whichever situation applies to you, you’re probably wondering how much time you have to pay this tax bill.
The short answer is that you probably don’t have as much time as you’d like, at least to avoid paying interest and penalties, but you do have some time before the IRS starts aggressive collection actions. As scary as this sounds, however, there are things you can do to deal with these situations.
In this blog post, we’ll discuss when tax payment deadlines usually come up and what you can do if you can’t immediately pay your full tax balance by the due date.
An Overview of Tax Payment Deadlines
If you’re like most taxpayers, the only tax payment deadline you worry about is the one that comes on April 15 of each year (or the next business day if April 15 falls on a holiday or weekend), which is the deadline for filing your individual income tax return. Besides filing your individual income tax return by this date, you also have to pay any taxes that may be owed based on your return.
One thing to keep in mind is that even if the IRS grants you a tax filing extension, any taxes you owe are still due by the original April 15 filing deadline. Also, if you’re a self-employed individual, you may be required to make estimated quarterly tax payments which are due on or around April 15 (first quarter), June 15 (second quarter), September 15 (third quarter), and January 15 (fourth quarter).
If you’ve entered into a payment plan or installment agreement with the IRS to pay your taxes over time, you should have a certain day of the month (which you can pick yourself) when your monthly payment is due.
In addition to these personal deadlines, there are also a variety of deadlines for business taxes. For example, if you have employees, you need to file quarterly payroll returns and pay monthly or weekly depending on your assigned schedule. There are also various deadlines for corporate returns based on the type of corporation and/or its fiscal year.
How Long Do You Have to Pay Back Taxes?
Back taxes don’t always have a specific deadline for when they have to be paid back, although not fully paying them off immediately usually means paying penalties and interest.
Sometimes the IRS sends you a notice or letter informing you of unpaid taxes and gives a deadline for you to pay off the full balance before the IRS charges a failure-to-pay penalty. This deadline is 21 calendar days from the date the IRS sends the letter. If the amount owed is $100,000 or more, the deadline is 10 business days from the date the IRS sends the notice.
You also only have to pay your back taxes to the IRS for as long as the IRS has the legal right to collect them. The IRS normally has 10 years from the date of assessment to collect the tax. This 10-year deadline is sometimes referred to as the Collection Statute Expiration Date, or CSED.
If you have a tax bill that’s more than 10 years old, the IRS can’t legally go after you to collect it. Therefore, you no longer have to pay off that tax balance. The CSED can sometimes get extended if a certain event occurs that adds time to the CSED or pauses the running of the CSED clock. Examples of these events include filing bankruptcy, applying for a payment plan, or appealing an IRS decision.
Consequences for Missing a Tax Payment Deadline
Several consequences could potentially apply if you miss a payment. The most common are penalties and interest. If you file your individual tax return and don’t pay the full amount of taxes owed, your failure-to-pay penalty is 0.5% of the remaining tax amount for each month the tax goes unpaid. This penalty can’t exceed 25% of the total unpaid tax amount. This 0.5% penalty drops to 0.25% if there’s an IRS-approved payment plan in place.
If you have an unpaid tax that wasn’t reported on a tax return, the failure-to-pay penalty is the same 0.5% for each month the tax remains unpaid. However, there’s no 25% penalty cap.
As for interest, it’s compounded daily and the IRS uses special tables to calculate the applicable interest rate each quarter. During Q1 2025, the interest rate for underpayments is 7%.
The consequence of a missed tax payment that’s part of an installment agreement or payment plan is that the IRS may consider you to be in default. If that happens, the IRS might terminate the payment arrangement. Before doing this, the IRS should provide at least 30 days (and a CP523 Notice) for you to cure the default, which means catching up on the missed payment(s).
Regardless of when, how, or where you miss a tax payment, if you don’t find a way to make another arrangement with the IRS, you can expect more significant collection actions. It may begin with a letter or notice from the IRS, such as a CP14, CP501, CP503, or LT38. These are to inform you about your delinquent taxes and convince you to pay up. If you don’t, the IRS may send you additional notices or letters, like CP504, before it files a lien or implements a levy.
What You Can Do If You Can’t Pay in Full By the Deadline
If you can’t pay off the entire tax amount by the deadline, your most likely option is to reach an agreement with the IRS to pay off your tax debt over time. There are two main ways to do this.
First, there’s the short-term payment plan. You may be eligible if your unpaid tax balance is $100,000 or less and you can pay off the full amount within 180 days. You can apply for this online, in person, by phone, or by mail.
Second, there’s an installment agreement (sometimes called a long-term payment plan), which gives you up to 72 months to pay off your tax debt. How you apply depends on how much you owe the IRS. There may also be special qualification requirements depending on the type of installment agreement you want to apply for.
In some cases, you may be able to get the IRS to agree to accept a partial payment of your tax debt. The two most common ways to do this are through the offer in compromise (OIC) and the partial payment installment agreement (PPIA). An OIC is where you submit an offer to the IRS to settle your tax debt with them, but the amount offered is less than what the IRS claims you owe them. Because of how beneficial this can be for taxpayers, there are strict qualification criteria and submitting an OIC can be a complicated and lengthy process.
With a PPIA, you make monthly payments to the IRS for a set amount of time. At the end of that time period, the IRS forgives any tax balance remaining.
Lastly, there’s CNC, or currently not collectible, status. If the IRS grants your request for CNC status, the IRS agrees to pause tax collection efforts because you’ve demonstrated sufficient financial hardship. This means you can’t pay your taxes (even with a payment plan or installment agreement) in addition to your basic living expenses.
Achieving recognized CNC status isn’t always forever, though. The IRS may periodically review your finances to see if your economic situation has improved enough so they can resume tax collection efforts. There’s also the fact that even if you obtain CNC status, interest and penalties will continue to accrue.
If you remain in CNC status long enough such that the statute of limitations for collecting the taxes passes, then you won’t have to pay back any of the remaining tax debt to the IRS. This isn’t a common occurrence, but it’s something to look into as a possible option.
Hiring a Tax Professional to Help
Depending on what strategy you want to take, you might benefit from talking to a tax pro. For example, if you’re going to send an offer in compromise to the IRS or challenge an IRS collection action, like a wage garnishment, it might be a good idea to get a professional to tell you what to do and guide you through the process. Also, if there’s a lot of money at issue, hiring someone can help level the playing field as the IRS will surely have extra people on their end trying to collect the tax.
Not being sure which strategy to take is another reason to consult with a tax pro. They can review your situation and help you decide what to do next. In some cases, you can take the next steps yourself. In other cases, you might need extra guidance, which your tax professional can provide.
Lastly, hiring a tax professional offers peace of mind. Even if you have a relatively simple or straightforward tax case, hiring a tax professional can help you sleep better at night by letting someone with plenty of tax experience examine your case and confirm if your approach is the right one. And if it is, they can double-check that you’ve properly completed the forms and provided the necessary information to the IRS to achieve the best possible outcome.
Hiring a tax professional also helps reduce some of the work you’ll have to do by letting your tax professional advocate on your behalf, including negotiating with the IRS by mail and over the phone.
Talk to a Tax Professional About Your Upcoming Payment Deadline
If you’re facing a pending tax payment deadline and aren’t sure what to do, contact Damiens Law. We have years of experience helping taxpayers with similar issues and are more than happy to review your case and advise you on what happens next. To learn more, give us a call at 601-476-1361 or use our online contact form.
Tax Payment Deadline FAQs
Does the IRS grant extensions to pay taxes?
Generally speaking, the IRS grants extensions to file taxes, not pay them. That being said, the IRS provides extra time to pay taxes, but at a cost, such as penalties and interest. The IRS also offers payment plans and installment agreements, which allow you to pay off your taxes over time.
How much time do I have to pay my back taxes?
It depends on the tax payment and how much extra money you want to pay the IRS. If you have unpaid taxes, you can theoretically take as much time as you want. But the longer you wait, the more you’ll pay in interest and penalties. There’s also a greater risk of an IRS lien or levy.
If you owe taxes after filing your individual income tax return, the accompanying tax payment is due at the same time your tax return is due (on or around April 15). If you need to make a monthly payment as part of a payment plan or installment agreement, the IRS typically provides a 30-day grace period before they consider you to be in default.
Will the IRS reduce or forgive the unpaid taxes I can’t pay?
Maybe. The IRS has several options that may allow you to settle your tax debt for less than the full amount. These include things like penalty abatement, an offer in compromise, and a partial payment installment agreement. However, because these can be highly advantageous for taxpayers, the IRS doesn’t allow just anyone to use these programs. They may also have a complex and lengthy application process.
If I wait long enough to pay, will my tax debt go away?
Theoretically, it can, as there’s a 10-year collection statute of limitations. If the IRS can’t collect your tax debt within 10 years, the IRS becomes legally barred from trying to collect that tax balance from you. Before you get your hopes up, the IRS is pretty good about not letting this deadline pass and there are ways to extend this deadline or pause the running of this 10-year clock.
