If you find yourself with a mound of debt from back taxes, either from an unfiled tax return or from failure to pay in past years, you should know that there is another option besides a lump sum payment in full. It is possible to arrange an income tax payment plan to pay the back tax in smaller monthly payments rather than paying it all at once. Taxpayers can choose from a few different types of income tax payment plan when they find themselves in this situation.



The first option is to apply for an installment agreement, in which the Internal Revenue Service will allow you to pay the amount owed from an unfiled tax return and other back taxes in monthly incremental payments plus interest and penalties. This type of income tax payment plan is not too hard to qualify for, but you must be able to maintain a minimum monthly payment.

Another type of income tax payment plan that you can apply for is the partial payment installment agreement, in which the Internal Revenue Service makes special arrangements for people who can't make the monthly minimum payments for the installment agreement. You might end up paying less than the total amount of back tax that you owe with this arrangement. It is sensible to acquire the services of an IRS tax relief professional to assist you with the process, though, since the approval process is more stringent. You will only qualify for this plan if you can prove that you don't have the means to afford the regular payment plan. The Internal Revenue Service will also periodically request an updated financial statement to see if your financial standing has improved enough to increase the amounts paid monthly.

The only other option is to delay the Internal Revenue Service a few months until you are able to pay, which is only recommended if you can get an extension for your payment and you know you will have the money in time. If you don't know how you're going to come up with the money, though, it's best to work with an IRS tax relief specialist who can arrange a good plan for you to pay what you owe.