What if I Can’t Pay My Taxes?

What Happens if You Don't Pay Taxes?

If you don't pay taxes, you will face late fees, interest on unpaid tax and a potential lien against your property. Here's what to expect.

You'll Pay Fees

The IRS will charge you for two separate issues: for failing to file a tax return, and for failing to pay the amount you owe, if any, once you do file.

Let's say you neglect to file a return by the federal deadline of April 15 and it turns out you owe tax. You could expect the following:

• The IRS will charge you 5% of the unpaid tax you owe per month for up to five months, up to a maximum of 25%.
• If you file more than 60 days late, you'll pay a minimum late filing fee adjusted annually ($525 for tax returns filed in 2026) or 100% of the unpaid tax as a penalty—whichever is less.

You'll also pay a penalty if you do file your tax return but don't pay the taxes you owe by the deadline. That penalty is 0.5% of the unpaid balance per month, up to a maximum of 25%. The penalty rises to 1% per month if you don't pay within 10 days of receiving an "intent to levy" letter from the IRS. This is a final notice that you still owe tax and that the IRS may seize your bank accounts or state tax refund or garnish your income to recoup its losses.

You May Face a Tax Lien

The IRS may also file a lien against property you own to establish their claim against it. When a lien is in place, the IRS can collect part of the proceeds to pay off the tax debt if you sell the property.

A tax lien could also affect the likelihood you'll qualify for credit in the future. Tax liens won't appear on your credit report, so lenders won't be able to see the lien simply by performing a credit check; the lien itself won't affect your credit scores, either. However, some lenders, particularly mortgage lenders, may perform a public records search during the application process, and the lien will be visible there. That could prevent you from qualifying for a loan.

You'll Pay Interest on Unpaid Tax You Owe

Then there's interest on unpaid tax: From your filing deadline to the date the tax is paid, you'll pay the federal short-term interest rate plus 3%. For the first quarter of 2026, the interest rate for individuals who owe tax is 7%.

Manage Your Finances

Compare checking accounts

Find a digital checking account with intro bonuses, low or no monthly fees and see current APY on checking.

Featured Account

Experian Smart Money™ Digital Checking Account & Debit Card

BONUS

$50 with qualifying direct deposits^‡

MONTHLY FEE

$0

MIN OPENING DEPOSIT

$0

VIEW DETAILS

FDIC Insured

Product Disclosure

FDIC Insured

See MoreSee Less

ADDITIONAL FEATURES

• Build credit by paying bills like utilities, streaming services and rent^ø
• $50 bonus with direct deposit^‡
• No monthly fees, no minimums^‡
• Secure & FDIC insured up to $250,000^§
• Zero liability for fraudulent purchases^¶
• 55,000+ no-fee ATMs worldwide**
• Deposit cash at popular retailers^#
• Live customer support 7 days a week

Ways to Get Tax Relief

The IRS has multiple programs in place to help if you're having trouble paying taxes. You can call the IRS at 800-829-1040 to talk about your options. Here are some examples of the tax relief available:

• Payment extension: You can get up to 180 days to pay in full by agreeing to a short-term payment plan with the IRS. Penalties and interest will continue to add up, but it's free to apply. Submit an application using the IRS' online payment agreement form.
• Installment agreement: The IRS offers long-term monthly payment plans if you need more time to pay tax than what a short-term payment extension would provide. You'll pay a user fee for entering a payment plan, but if your income falls beneath certain thresholds, you may be exempt from the fee. You can make monthly payments by several methods, including direct debit, credit card, check or money order. The setup fee is $22 if you choose direct debit and $69 if you choose other payment methods.
• Offer in compromise: If you cannot afford to pay your tax bill in full using an installment agreement, you can coordinate with the IRS to pay less than you owe by a certain deadline. This arrangement is called an offer in compromise. You must be up to date on all filing deadlines to qualify for an offer in compromise; check if you meet the requirements using the IRS' online prequalifier tool.
• Penalty relief: If it's your first time not being able to meet your tax obligations, you can apply for a first-time penalty abatement, which will eliminate penalties for failing to file or failing to pay on time.
• Temporary collection relief: If you can't currently pay your taxes at all due to a demonstrable financial hardship, you can arrange with the IRS to temporarily delay collection of the debt. Penalties and interest will continue to accrue, and the IRS may still file a tax lien against your property during a delay in collection.

What to Do if You Can't Get Tax Relief

In nearly all cases, an official method of relief will be available to you. You might start by paying whatever you can now to show the IRS that you're committed to paying your bill eventually. Then, get in touch with the IRS to identify options for paying over time, which can help prevent an unwanted outcome like a tax lien or outsize fees.

Avoid paying taxes with a credit card. Using a credit card will mean incurring extra fees and interest, and increasing your credit utilization, which could hurt your credit. A personal loan is another option, though it will add an installment debt to your monthly expenses—potentially at a higher interest rate than what you'd pay through the IRS for a payment plan, depending on your credit score.

If debts and other financial needs are making it impossible to meet your tax obligations, consider credit counseling or financial assistance. A credit counselor can work with you to assess and tackle your debts. And if you're in need of financial help, there are resources out there that can help you take care of bills, pay for food and connect you with government aid programs. You can start by calling the 211 hotline for referrals to social services.

Frequently Asked Questions

The Bottom Line

Like other types of debt, unpaid taxes can feel like a heavy burden. But there are many pathways out of it. You'll have the best chance at finding relief if you take action as quickly as possible once it's clear you can't pay what you owe. Make a plan to pay what you can afford, in consultation with the IRS, and move forward from tax troubles and focus on the goals that matter to you.