What to Do When You Cannot Pay Your HVUT

A tight month should not stop you from filing. When the Form 2290 deadline arrives and the cash is not there, the worst move is to sit on the return, because the penalty for filing late is far heavier than the penalty for paying late. File on time, then work the payment.

File on time even if you cannot pay

The two IRS charges are not the same size. Failing to file runs about 4.5 percent of the tax due per month, up to five months. Failing to pay runs a much smaller 0.5 percent per month, plus interest. By filing on time you avoid the large penalty and get your stamped Schedule 1, which you still need to keep the truck registered, while you deal with the balance.

Pay what you can now

You do not have to pay all or nothing. Sending in as much as you can afford shrinks the unpaid balance that both the late payment penalty and the interest are calculated on. Even a partial payment lowers what those charges add up to while you arrange the rest.

Ask the IRS for an installment agreement

If you cannot clear the tax in one payment, the IRS offers installment agreements that let you pay over time. Interest and the late payment penalty keep accruing until the balance is gone, so it is not free, but it turns a bill you cannot meet into manageable payments. You request it directly from the IRS.

Can you file now and pay later?

To a degree, yes. If you pay by electronic funds withdrawal you can often schedule the debit for the due date rather than the filing day, and other methods let you transmit the return now and send the payment separately as long as it reaches the IRS by the deadline. Filing and paying are two steps, and the return can go first.

Source

Penalty rates, installment agreements, and payment methods are described by the IRS at irs.gov/payments and in the Instructions for Form 2290 (irs.gov/instructions/i2290). Confirm current options and any fees with the IRS before you rely on them.