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IRS Payment Extensions for Undue Hardship

IRS Form 1127

How to Get an IRS Payment Extension

Taxpayers can request a payment extension of six months or more if paying the tax on time will cause an undue hardship. Use Form 1127 to file this request extra time to pay your taxes without incurring late-payment penalties.

Who Can Use Form 1127?

Form 1127 can be used to request a payment extension for:

  • Tax due on a return
  • Deficiency amounts that were added after an IRS examination

If the tax is due on a return, you need to file Form 1127 before the return’s due date, not including any filing extensions. Payment extensions for deficiency amounts must be requested before the payment due date.

You can request payment extensions for income taxes, self-employment taxes, and some other less common types of taxes.

Effect of Payment Extension

If you don’t pay by the extended deadline, the IRS will begin assessing late-payment penalties and may pursue enforced collection actions. Payment extensions are a temporary solution, so you may need to consult with a tax resolution attorney to develop a long-term plan for paying off your tax debt.

Undue Hardship

You’ll only receive a payment extension if you establish that paying your taxes on time will cause undue hardship. This can be shown by explaining the substantial financial loss you would incur.

For example, if you would need to sell assets at a price far below their fair market value in order to pay your taxes, this could qualify as an undue hardship. You must give specific details, as a general statement of hardship won’t qualify for a payment extension.

You’ll also need to provide three months of income and expense information, along with a state of your current assets and liabilities.

If you do receive a payment extension, make sure you are prepared to pay your taxes by the extended deadline or consult a tax attorney to explore your tax settlement options.

Get help settling your IRS tax debt by calling Ayar Law at 248-262-3400 to request your consultation with a tax attorney.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.