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Frequently Asked Tax Questions

IRS Procedures - Collection Procedural Questions

  1. I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?
  2. What kinds of interest and penalties will I be charged for filing and paying my taxes late?

Rev. date: 07/10/2013

I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?

You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing economic hardship or other special circumstances.
Note: Offer in Compromise Application Fee - Your offer must include the $150 application fee. If you are requesting a low-income exception of the fee, you must complete section 4 of the Form 656 (PDF), Offer in Compromise.
Offers received without the $150 fee or a completed section 4 of the Form 656 will not be accepted for processing.  Please see Step 6 on Page 4 of the Form 656-B (PDF), Offer in Compromise Booklet, for more information on the application fee, and section 4 of the Form 656 to determine if you qualify for the low-income exception.  Please also see Steps 2 and 3 on Page 4 of the Form 656-B to determine whether your application must include either a completed Form 433-A (OIC) (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B (OIC) (PDF), Collection Information Statement for Businesses.

Rev. date: 04/03/2013

What kinds of interest and penalties will I be charged for filing and paying my taxes late?

Interest is compounded daily and charged on any unpaid tax from the due date of the return (without regard to any extension of time to file) until the date of payment.
In addition, if you didn't pay your tax on time, you'll generally have to pay a late payment penalty.
If you did not file on time and owe tax, you may owe an additional penalty for failure to file unless you can show reasonable cause.
Note: If you feel a penalty or interest is assessed in error, you may refer to Publication 1 (PDF), Your Rights as a Taxpayer.