Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Finance Tax Relief How to Find Out If You Owe the IRS Back Taxes, and How Much Updated Mar 17, 2025 7-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Timothy Moore, CFEI® Written by Timothy Moore, CFEI® Expertise: Bank accounts, credit cards, taxes, insurance, personal loans Timothy Moore is a Certified Financial Education Instructor (CFEI®) specializing in bank accounts, student loans, taxes, and insurance. His passion is helping readers navigate life on a tight budget. Learn more about Timothy Moore, CFEI® Reviewed by Erin Kinkade, CFP® Reviewed by Erin Kinkade, CFP® Expertise: Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families. Learn more about Erin Kinkade, CFP® Each April, we file and pay our taxes (or, if we’re lucky, get a refund). But sometimes, the tax bill is too high, and we can’t afford to pay. Other times, life gets in the way, and we forget to file at all (or file too late), or we make mistakes when filing taxes and wind up underpaying the Internal Revenue Service (IRS). These circumstances can lead to back taxes, made heavier by penalties and interest. But how do you know if you’re in debt to the IRS, and how can you calculate how much you must pay? Below, we’ll show you how to know if you owe the IRS—and what to do about it. Table of Contents Skip to Section How to know if you owe the IRS moneyWhat to do if you owe the IRS moneyHow much will it cost to repay the IRS?How long do I have to pay off my tax balance?FAQ How to know if you owe the IRS money The two main ways to determine if you owe money to the IRS are: The IRS will notify you by mail. Check with the IRS. The IRS notifies you Since you’re here, asking how to know if you owe taxes, it’s safe to assume you haven’t heard from the IRS (yet). The IRS is supposed to notify you by mail if you owe them anything. The initial letter will detail how much you owe and demand prompt payment. Ignoring this notice can lead to more interest and late fees, and the IRS may garnish your wages or place a tax lien on your assets. Always update your address with the IRS to ensure you get these important notices. You can update your address when you file taxes, set up mail forwarding, or submit Form 8822 or 8822-B. If you don’t respond to the IRS’s letters, it may contact you by phone or in person. If you’re uncertain about the legitimacy of a call, hang up and contact the IRS. Remember, the IRS will never contact you by text or social media—any such messages are likely scams. Of course, there’s a chance that you never received notification by mail, phone, or in person, due to a change in contact information. Or perhaps IRS agents just haven’t started reaching out yet. Read More Wage Garnishment: What It Is and How to Stop It You check your tax balance You don’t need to wait for the IRS to contact you to determine whether you owe it money. It’s better to be proactive—the sooner you find out you owe the IRS money, the sooner you can make a plan to pay down the debt, and the less you’ll incur in interest and late fees. So, how do you check your tax balance with the IRS? An online account is easiest, but you have a few options. MethodHow to do itBest forOnlineLog in to your online tax accountEveryone—this is the IRS’s recommended actionOver the phoneCall the number on your bill (or call 800-829-1040)Those who aren’t internet-savvyHire a professionalFind a tax professional you trustThose overwhelmed by their tax situation Online The IRS recommends logging in to your online IRS account to check your tax balance, payments, tax records, and any other important document, notice, or piece of information regarding your tax history. You can sign in to your account here. You’ll need photo identification to sign up if you haven’t yet created an IRS online account. Over the phone If you get a notice from the IRS, it should include a direct number to call to discuss options. But if you’re trying to be proactive, you can call the IRS to discuss your debt at 800-829-1040. Hire a professional Sometimes, determining and settling IRS debt can be overwhelming, and the process feels like a neverending mountain of paperwork and phone calls. In those scenarios, hiring a tax accountant to help make sense of your situation can be helpful. Hiring one of our best tax relief companies may make sense if you owe a significant amount and need to devise a payment plan or consider alternative options (discussed below). Remember: Tax relief services can cost a significant amount, and they can never guarantee success in negotiating a payment plan or lowering your overall debt. What to do if you owe the IRS money We’ve reviewed how to know if you owe the IRS money, but where do you go from there? You have several options to settle your tax debt, but not all the paths forward are available to everyone—and most come at an additional cost. PlanBest forPay in fullEveryone—this option gets you out of debt immediately and at the lowest costInstallment agreementThose who can pay but need to spread out paymentsOffer in compromiseThose who can’t afford the full tax billCurrently not collectible statusThose in true financial hardship Read More How to Settle Tax Debt With the IRS By Yourself: 5 Options to Consider How much will it cost to repay the IRS? How much it costs to repay the IRS depends on the route you take. At a minimum, you’ll owe late penalties and interest charges: Late penalties: You may owe a failure-to-pay penalty of one-half of 1% of each month (or part of a month) you don’t pay, up to 25% of your total tax debt. If you also didn’t file, you’ll also owe a failure-to-file penalty equal to 5% of the tax owed for each month (or part of a month) you don’t file your return, up to 25% of your total tax debt. Interest: Late payments accrue interest equal to the federal short-term rate plus 3%. However, you may also pay fees for the alternative repayment methods discussed above: Installment plans: Setting up a short-term payment plan is free, but setting up a long-term payment plan costs between $22 and $178. Offer in compromise: Applying for an OIC costs $205. Currently not collectible: Because applying for this status is challenging, you may need to hire a professional tax relief service, which costs between $1,500 and $4,000 for CNC applications. Read More So You Owe the IRS $25,000, $50,000, or More? What Happens Next How long do I have to pay off my tax balance? The IRS has 10 years to collect taxes owed, including penalties and interest, but several scenarios can extend this period, such as an OIC or CNC status. Avoid taking 10 years to repay your taxes because you’ll accrue interest and late charges during this time, and the IRS can garnish your wages and seize your assets to settle your debt. To that end, you always have until Tax Day—typically April 15—to pay taxes due from the previous year. If you can’t pay by then, work with the IRS to set up a payment plan. Our expert’s advice Erin Kinkade CFP® I recommend reviewing and updating your W-4 every year for federal taxes, and if you live in a state that imposes state income tax, I also recommend updating that form each year. Don’t assume your W-4 elections will carry over to your new job if somebody changes jobs. (Your employer should require you to complete a new W-4 and state withholding form, if applicable). You can use the Tax Withholding Estimator tool for federal taxes to understand how much you should withhold. You should be able to find something similar for the state you live in if it collects state income tax. Another helpful strategy, which is required if you are a 1099 employee, is to pay as you go and pay taxes quarterly throughout the year. FAQ Will the IRS always notify me if I owe money? Yes, the IRS notifies taxpayers if they owe money. This notification will come in the form of a letter or notice explaining the amount owed, the reason for the balance, and instructions on how to pay. Keeping your contact information updated with the IRS is essential to ensure you receive these communications. You can contact the IRS or check your account online if you suspect you owe money but haven’t gotten a notice. What makes you owe the IRS money? You may owe the IRS money for various reasons, such as underpaying taxes, underreporting income, or errors on your tax return. Additional reasons can include penalties for late filing or late payment, interest on unpaid balances, or discrepancies discovered during an IRS audit. Even honest mistakes or oversights—forgetting to report certain income or credits, for example—can result in a tax liability. Read More What Happens If You Don’t File Taxes but Don’t Owe Anything? Can the IRS take money from my bank account without notice? No. The IRS has the authority to levy (seize) funds from your bank account to pay off tax debts, but it must provide notice before doing so. The process involves the IRS sending you a notice demanding payment and informing you of your right to a hearing. If you don’t respond or resolve the debt, the IRS can issue a final notice of intent to levy, often 30 days before taking action. This notice allows you to address the debt or appeal the decision before the IRS accesses your bank account.