What to Do If You Owe the IRS But You Can’t Pay

If you’ve started preparing your return via online tax prep software or even walked into a physical location somewhere, only to learn you owe more than you can pay, don’t simply stop the process.

You’re so much better off sending the return in, or filing a valid extension. Let’s say you owe $20,000 and you usually get a refund,” says Cari Weston, senior technical manager on the American Institute of Certified Public Accountants tax staff. “Don’t think to yourself, ‘I don’t have the time.’

Penalties for late filing begin to accrue on April 16, and they add up quickly. If you file more than two months after the due date, the minimum penalty is either 100 percent of the unpaid tax or $135, whichever is smaller. And that fine begins to rack up interest almost immediately.
Full article