The IRS may be able to offer some help, such as a short-term payment extension (which is paid in 120 days or less), an installment agreement, an offer to compromise, or temporarily delay collection by stating that your account is currently uncollectible until you can pay. Most importantly, if you think you might have trouble paying your tax bill, contact the IRS right away. In many cases, there are steps we can take to help ease the burden. You must also file a tax return even if you can't pay to avoid additional penalties.
But what if you can't pay your taxes at all? In this situation, you can request a temporary delay in payment. If you're having financial difficulties, the IRS may be willing to suspend collection actions on your account until your financial situation improves. It's not easy to qualify for this program. You must provide comprehensive documentation to show that you can't pay.
A tax attorney can help you navigate this IRS help program. Another option is to request an offer of commitment (OIC). This is a type of tax relief that allows you to pay off your tax debt for less than what you actually owe. When you request an offer of commitment, you basically offer the IRS an amount that you can pay in the hope that they will accept the lower amount and settle your tax debt.
The IRS analyzes your ability to pay, your income, your expenses, and how much your things are worth to decide if your offer is really all they can get from you. The IRS usually requires you to file tax returns due before reaching an agreement with the IRS (and most states do, too). If you're really going through financial difficulties, such as the death of your spouse or the loss of a job, you can ask the IRS to place your bill in its “currently uncollectable” status. Otherwise, you should call the IRS directly, work with a tax professional, or fill out Form 9465 and mail it to the IRS.