Understanding Balance Due, Payment Options, and CNC Status

The Internal Revenue Service is reminding taxpayers across the United States 🇺🇸 that when total tax exceeds total payments for the year, the result is an underpayment and a balance due that must be paid by the return’s due date to avoid interest and penalties. For most filers, the deadline is April 15.

Even if someone can’t pay the full amount, the IRS urges them to still file on time and pay as much as possible to limit added charges. VisaVerge.com reports that the IRS offers multiple channels for payments and limited relief tools for people who can’t pay in full, underscoring that filing on time is the safest first step to control extra costs.

Payment options and deadlines

When a taxpayer has a balance due, the IRS lists several ways to make payments quickly and securely.

• Payment methods: check, cashier’s check, money order, credit card, debit card, or digital wallets such as PayPal or Venmo.
• Payment channels: mail, phone, online, mobile app, or in person.
• Electronic transfer: IRS Direct Pay offers a free way to send money directly from a checking or savings account.
• Online and mobile: Payments are available on the official IRS payments page. IRS2Go is the IRS’s official mobile app for on-the-go access.

In-person payments are available at IRS Taxpayer Assistance Centers (TACs) or at participating retail partners. Note that not all TACs accept cash.

• To pay cash at a TAC, taxpayers must call 844-545-5640 to schedule an appointment.
  • The IRS advises calling 30 to 60 days before the planned payment date.
  • Appointments can only be scheduled within 60 days of the call.
• To pay cash at a retail partner, start at ACI Payments, Inc. and follow the instructions to set up the cash transaction.

Retail cash-payment network

The IRS lists several national retailers that participate in its cash payment network, including:

• Dollar General, Family Dollar, CVS, Walgreens, Walmart
• Pilot Flying J, 7-Eleven, Speedway, Kum & Go, Stripes
• Royal Farms, GoMart, Sheetz, Rutters, Travel America, Kwik Trip

This network gives taxpayers more places to make payments if they don’t have a bank account or prefer to use cash.

Mail payments and required details

For those paying by mail:

• Make checks payable to “United States Treasury.”
• Write these identifying details on the check:
  • First Social Security number listed on the return
  • Tax year
  • Form number

When mailing a payment for Form 1040 or Form 1040-SR, taxpayers should include a Form 1040-V Payment Voucher, though it is not required. For convenience, official form pages include:

• Form 1040
• Form 1040-SR
• Form 1040-V

The IRS’s basic message is clear: if you owe, pay by the due date to avoid extra charges. If you can’t pay the full amount, submit the return anyway and send as much as you can—doing so helps reduce interest and penalties tied to the underpayment.

Relief options when you can’t pay

If a taxpayer cannot pay a balance due right now, the IRS offers options that address different circumstances. The two primary paths are:

1. Currently Not Collectible (CNC) — temporary delay of collection
2. Extension of time to pay due to undue hardship — file Form 1127

Currently Not Collectible (CNC)

• CNC allows the IRS to temporarily delay collection and mark the account as currently not collectible when the taxpayer cannot pay at this time.
• CNC does not erase the debt; penalties and interest continue to accrue until the balance is paid in full.
• The IRS may suspend certain collection actions (for example, issuing a levy) while CNC is in effect, but it may still file a Notice of Federal Tax Lien.
• Before granting CNC status, the IRS may request a Collection Information Statement and will continue to review the taxpayer’s ability to pay.

Extension of time to pay due to undue hardship (Form 1127)

Taxpayers who would face undue hardship by paying on the due date can request more time by filing Form 1127 Application for Extension of Time for Payment of Tax Due to Undue Hardship.

• Undue hardship is defined as more than an inconvenience—for example, being forced to sell property at a substantial loss.
• A detailed explanation and supporting documentation are required; a general claim of hardship is not sufficient.
• Official form: Form 1127

Under section 6161, Form 1127 can be used for two categories:

• Tax shown or required to be shown on a return
• Amount determined as a deficiency (an amount owed after the IRS examines a return)

If the request is for tax shown or required to be shown on a return, Form 1127 may be filed for these types of taxes (examples):

• Income taxes
• Self-employment income taxes
• Withheld taxes on nonresident aliens and foreign corporations
• Taxes on private foundations and certain tax-exempt organizations
• Taxes on qualified investment entities
• Taxes on greenmail
• Taxes on structured settlement factoring transactions
• Gift taxes

If the request is for an amount determined as a deficiency (after the IRS issues a notice and demand for payment), Form 1127 may be filed for:

• Normal taxes and surtaxes
• Taxes on private foundations and certain tax-exempt organizations
• Taxes on qualified investments
• Gift taxes

Limits, deadlines, and conditions for extensions

• For tax shown on a return: extension generally won’t be longer than six months from the original due date (not including extensions).
  • A longer extension may be granted for taxpayers who are out of the country, with some exceptions.
• For a deficiency: extension generally won’t be longer than 18 months from the date payment is due, with an additional 12 months possible in exceptional circumstances.
• An extension for a deficiency will not be granted if the deficiency is caused by negligence, intentional disregard of rules and regulations, or fraud with intent to evade tax.
• Interest continues to accrue on the total amount due from the original due date until fully paid, even if an extension is granted.
• Penalties may also apply if the taxpayer fails to pay within the extension period.

Required supporting documentation for Form 1127

Form 1127 must include:

• A statement of assets and liabilities
• An itemized list of income and expenses for each of the three months before the tax due date

The IRS may request additional documentation or set conditions after reviewing the request.

Timing for submitting Form 1127

• File Form 1127 and the supporting documents as soon as the taxpayer knows they cannot pay without undue hardship.
• If seeking extra time to pay the full amount shown or required to be shown on an upcoming return, the IRS must receive Form 1127 on or before the return’s due date (not including extensions).
• If seeking extra time to pay an amount determined as a deficiency, the IRS must receive Form 1127 on or before the due date for payment listed in the tax bill.

Practical takeaways and best practices

• CNC status pauses active collection when immediate payment is impossible; an undue hardship extension postpones the due date in limited, documented situations.
• In both cases, interest continues to accumulate, so sending partial payments when possible still helps reduce the overall cost.
• Choosing a payment method matters:
  • Paying online via the IRS payments page or IRS Direct Pay can be faster than mailing a check.
  • Retail partners offer options for taxpayers who prefer cash.
• When mailing a check:
  • Ensure it’s payable to “United States Treasury”.
  • Include the first SSN on the return, tax year, and form number.
  • Including a Form 1040-V with mailed payments for Form 1040 or Form 1040-SR returns is recommended (but not required).

Whether the amount is small or large, making payments by the deadline will lower the cost of a balance due. If paying in full is not possible, file on time, pay what you can now, and choose the right relief option to limit penalties and interest while you work toward clearing the underpayment.