Taxpayers who cannot pay their tax bill by the April 18, 2023 deadline should not be alarmed. The IRS offers several options to help you meet your obligations.

It is important that taxpayers file their tax return or request an extension to file it in IRS.gov/extensions before the April 18, 2023 deadline, even if they cannot pay the full amount of their taxes. If they do, they will avoid a penalty for failing to file a tax return.

This extension only applies to the submission deadline, not the payment deadline. Except for victims of recent natural disasters, who have until October 16 to make multiple tax payments, taxpayers who cannot pay the full amount of tax due by April 18 must file and pay what they can Making a payment, even a partial one, will help limit penalty and interest charges.

Taxpayers who cannot pay the full amount may consider these payment options:

1. Online payment plans

Taxpayers who owe a debt but can't pay it off in full by April 18 don't have to wait for a tax bill to set up a payment plan. They can request a payment plan at IRS.gov/payment plan. These plans can be short or long term:

• Short Term Payment Plan – The payment period is 180 days or less, and the total amount due is less than $100,000 in combined taxes, penalties, and interest.
• Long-Term Payment Plan – The payment period is longer than 180 days, paid in monthly installments, and the amount due is less than $50,000 in taxes, penalties, and interest combined.

2. Offer in Compromise

An offer in compromise allows taxpayers to settle their tax debt for less than the full amount they owe. It may be an option if you are unable to pay your entire tax liability or if doing so causes financial hardship. The IRS considers each taxpayer's unique circumstances when deciding whether or not to accept an offer.

Taxpayers can see if they are eligible and prepare a preliminary proposal with the taxpayer tool. Prequalification of Offer in Compromise.

3. Relief from penalties for eligible taxpayers

Taxpayers may qualify for penalty relief if they tried to comply with the tax laws, but were unable to due to circumstances beyond their control.

*Here's what taxpayers should know about potential penalties and interest

Taxpayers who owe taxes and do not file them on time may have to pay a penalty for not doing so. This penalty is usually five percent of the tax owed for each month or part of a month of late filing, up to a maximum of 25 percent. The non-payment penalty is applied if a taxpayer does not pay the taxes that he indicated on his tax return before the due date

Interest is based on the amount of tax owed and for each day it is not paid in full. Interest is compounded daily, so it is calculated on the previous day's balance plus interest. Interest rates are determined every three months and may vary depending on the type of tax; for example, tax debts of individuals or companies. You'll find more information on the IRS.gov Interests page.