What If I Can't Pay My Crypto Taxes?

If you aren't able to pay your tax liability in full, the IRS offers payment plan options. Find out more.

Arthur Teller
ByArthur Teller, CPAUpdated on October 5, 2022 · minute read

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What If I Can't Pay My Crypto Taxes?

If you don’t have the funds to pay your taxes by the due date, you’re not alone. Many crypto traders are in the same situation this year.

You do have options. Most people choose to apply for one of the IRS payment plans. Be aware, however, that if you go this route, you will need to be completely transparent with the IRS about your finances. You’ll also have to pay some associated fees.

Tax controversy experts can be extremely helpful for taxpayers who need extra time to pay their taxes. We don't offer this service at TokenTax, but we're more than happy to connect you with attorneys we recommend.

Your payment plan options vary based on how much you owe and how quickly you think you’ll be able to pay off the debt:

1. You owe $50,000 or less including penalties and interest.

You're eligible for a long-term online payment plan. In this situation, you make monthly online payments to the IRS for until the balance of your unpaid taxes is met in full (up to 5 years). You will still accrue penalties and interest. You can apply online at the IRS's website.

2. You owe $100,000 or less including penalties and interest.

You're eligible for a short-term online payment plan. In this situation, you have 180 days to pay your balance. You will still accrue penalties and interest. You can apply online at the IRS's website.

3. You owe more than $100,000 including penalties and interest.

You may apply for an installment agreement with IRS Form 9465. This form has to be filed along with Form 433-F, which requires full disclosure of your assets.

TokenTax can help you complete Form 9465, but you will need to file it and Form 433-F yourself. If you’d like, we can introduce you to a tax controversy expert who can help you file forms and negotiate the terms of your IRS agreement.

4. You owe between $50,000 and $100,000 but can’t pay within 180 days.

Follow the instructions in the previous section.

5. Your tax liability is greater than the sum total of your assets.

There is another option called an “offer in compromise,” which settles a taxpayer’s debt for less than the full amount owed. However, most people don’t qualify for this, because your tax liability must be greater than the sum total of your assets, including your home, vehicle, and other property. If you think you are eligible, we strongly recommend contacting a tax controversy expert.

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Arthur Teller
Arthur TellerCOO at TokenTax
Arthur came to TokenTax after 12 years at KPMG. A specialist in partnership taxation and enterprise tax software, he is a licensed CPA in both California and Illinois and a member of the AICPA.

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