Lending Club Blog

What To Do If You Can’t Pay Your Taxes

Once more, it’s that time of the year when we prostrate ourselves in front of tax forms, software or tax preparation firms, to figure out whether we owe or get a refund on our taxes.   Many people find that, due to an inappropriate withholding, moving up a tax bracket, or some other esoteric reason, that they owe more in taxes than they can afford to pay.  In such a position, it might be tempting to avoid filing a tax return. This is not your best option. If you fail to file a tax form, you will be penalized with a fine, and that could only add to your problems. If you can’t pay your taxes, the best thing to do is to go to the IRS for help.

Believe it or not, the IRS has a system in place to help you make installment loans.  If you owe $25,000 or less, you can apply for a payment agreement with the IRS. You will have to pay interest, but the rate is usually quite reasonable. When applying, you will need some information. The IRS points out that you will need:

  • SSN or Individual Tax ID.
  • Birth date.
  • Number shown at the top of your recent notice of tax due.
  • PIN: If you don’t have a PIN, you can use your AGI
  • Highest amount you can pay, and when it can be paid
  • It helps to have your tax return in hand so that you can verify information

The IRS system will evaluate your payment application and let you know – usually instantly – if you are approved. If you owe more than $25,000, the process with the IRS is different but you still have to contact the them  directly to make arrangements.

Of course, if your payment agreement application is rejected, or if you prefer not to deal with the IRS directly and just pay it off, you can go with other options: credit card, line of credit from your bank, a personal loan, or even proceeds from selling stuff you don’t need anymore.  However, before you whip out the credit card (with its high interest), it might be worth applying for the IRS installment agreement or check your rate on a peer-to-peer personal loan.

Image courtesy of Marc Levin.

Friday, February 4th, 2011 at 4:30 am

Comments (3)

  1. K Reiff:

    Good to know! Any time I hear about someone that can’t pay their
    taxes I immediately think of the UK Debtors Prisons of the 19th
    century. I see people in shackles breaking rocks and doing other
    hard labor in exchange for their debt. It’s definitely relieving to
    hear that the IRS is willing to work with people…Especially those
    who might end up owing a significant amount due to those dreaded
    “esoteric” reasons. Last year was actually the first year that I’ve
    ever owed money. I’m hoping I’ll get away with just breaking even
    this year!

    February 4th, 2011 at 12:47 pm

  2. Jane:

    There are some people who can actually help you out; programs
    usually have counselors. There are lots of scammers out there too,
    so be careful. Check out their reputation (BBB, customer reviews,

    February 9th, 2011 at 3:41 pm

  3. The idea of paying your taxes with a credit card is ridiculous!

    February 14th, 2011 at 10:54 am


Types of Loans 101

Growing Your Business By Using Capital

9 Reasons to Open an IRA

6 Reasons to Get a Personal Loan

See more
Lending Club Awards
  • Archives z

Recent Posts

Types of Loans 101

There are many types of loans out there and… Read More »
September 16, 2016

Meet Patrick Dunne — Lending Club’s Chief Capital Officer

Patrick Dunne, Chief Capital Officer,… Read More »
September 8, 2016

Growing Your Business By Using Capital

Smart small business owners don’t wait to consider borrowing… Read More »
August 19, 2016

9 Reasons to Open an IRA

Retirement: a word that often comes with many connotations.… Read More »
August 5, 2016

6 Reasons to Get a Personal Loan

While it would be great if we all had enough… Read More »
July 29, 2016

Lending Club and the Marketplace Model

Some of our investors have observed the funding environment… Read More »
July 28, 2016

A Recap: Credit Strength on the Lending Club Platform

We are proud of our… Read More »
July 14, 2016

A Message to Investors from our President and Acting CEO

Today, our President and acting… Read More »
May 19, 2016

Lending Club Receives Tribeca Disruptive Innovation Award

Disruptive innovation comes in many… Read More »
April 29, 2016

Lending Club Business Financing Review

One of the biggest challenges of owning a small… Read More »
April 27, 2016


We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014
View All w