Owe Taxes? A New IRS Tool Can Help You Figure Out a Plan

If you owe the IRS money, a new free tool can help you decide what to do about it.

Tax Debt Help, which the IRS launched on April 16, walks people and businesses through a series of questions about their financial situation, then points them toward possible next steps based on their answers. Options may include a payment plan, a temporary delay of collections or an offer in compromise for taxpayers who qualify.

You don’t have to enter a Social Security number, name or address to use it, which means you can review your options before deciding what to do next.

What Tax Debt Help does

Tax Debt Help organizes existing payment options in a single, structured place so you can better understand how to settle your debt. For taxpayers who have been putting off dealing with a balance they cannot pay, the structure of payments matters. The longer a tax debt sits, the more it costs.

Taxpayers who do not pay their debt in full by the deadline face a failure-to-pay penalty of 0.5 percent of the amount owed per month, capped at 25 percent of unpaid taxes, plus interest.

Those who do not file at all face steeper consequences: a penalty of 5 percent of the amount due per month, also capped at 25 percent, with interest compounding daily. Filing an extension to Oct. 15 pushes the paperwork deadline. It does not push the payment deadline. 

One thing to know before you start: Most payment plans and relief options require that all your tax returns get filed first. The IRS says doing so opens up more options for resolving what you owe.

Tax Debt Help does not create specific new payment options for each user or collect payments. If you don’t know whether you owe the IRS money, you can check using this separate IRS account site.

What your tax-debt payment options are

As AARP has reported, the IRS offers four main paths for taxpayers who cannot pay in full.

A short-term payment plan allows taxpayers to pay what they owe within 180 days, with no setup fee. To qualify, they must owe less than $100,000 in combined taxes, penalties and interest.

A long-term installment agreement is available to taxpayers who owe $50,000 or less. Setup fees are $22 for automatic bank withdrawals or $69 for payments by check, money order or card. Low-income applicants may qualify for a fee waiver.

An offer in compromise allows qualifying taxpayers to settle their debt for less than the full amount owed. The application fee is $205, though it is waived for some low-income applicants. The IRS reviews a taxpayer’s financial situation before accepting an offer.

A hardship-based payment delay is available for taxpayers who can show that paying by the due date would cause undue financial hardship.

Something to bear in mind for the 2026 tax season: AARP Foundation Tax-Aide provides free tax preparation. Tax-Aide is open to everyone, with a focus on older adults with a low to moderate income. No AARP membership is required. This year, more than 28,300 volunteers helped 1.7 million people secure over $1.3 billion in refunds.