• Filing taxes and paying IRS debt should be done in a timely manner to avoid late fees.TAX TIME image by brelsbil from Fotolia.com
  
  The Internal Revenue Service recognizes that many taxpayers are not able to afford to pay all of their taxes in one lump sum. Paying the amount owed in a timely manner will save a taxpayer late fees and penalties. Although the IRS encourages individuals to pay as much money as they can on their owed taxes, they have made alternative options available.
  
  

Explore Alternative Financial Options

• Penalties for late payment to the IRS can be expensive. Considering alternative financial options will alleviate any further financial hardships that can occur. Look to cash advances or credit cards to help pay as much of the balance owed as possible. Take out a loan with your bank if the amount is large. The finance charges that are made by the bank will not be more than the IRS penalty charges. Borrow against life insurance policies or retirement funds or even liquidate assets.
  
  

The Installment Plan

• The IRS will usually work with taxpayers who are having difficulty with a payment. A request can be filed asking the agency to allow for an installment plan to be set up. The plan allots for monthly payments to be made against the debt. Tax form 9465 needs to be filed and approved in order for the installment plan to begin. In order to be eligible, the taxpayer cannot owe more than $10,000 to the IRS, have any late returns in the past five years and must agree to pay the debt within no more than 36 months. Interest and late fees will apply to the payments.
  
  

Extension

• The IRS can extend the time for filing. Form 4868 has to be filed and approved by the IRS. The extension can be up to six months and is dependent on the situation. Late returns without an extension will incur a 5 percent penalty each month until the return is filed. The return has to be filed by October 15 to avoid late fees.