Form 1127 (Rev. December 2024) — Application For Extension Of Time For Payment Of Tax Due To Undue Hardship
Purpose
Form 1127 is used to request an extension of time for payment of tax under Internal Revenue Code Section 6161 when immediate payment would cause undue hardship. This form applies to various tax types, including income tax, self-employment tax, withholding tax, foundation tax, and gift tax. Taxpayers must demonstrate that paying the tax on its due date would result in substantial financial loss—not merely inconvenience—and must provide comprehensive financial documentation, including current asset and liability statements plus three months of income and expense records before the tax due date.
This form can be used for any tax year where you owe tax and cannot pay without undue hardship. It is not limited to any specific tax year.
Filing Steps
1. Determine if Form 1127 is Required
Use the Determination Chart in the official instructions to verify Form 1127 is the appropriate form for your situation:
- File Form 1127 if: You are requesting postponement of payment of the full tax amount shown on your return or an amount determined as a deficiency, and immediate payment would cause undue hardship.
- Do NOT file Form 1127 if:
- You are seeking an extension of time to file your income tax return (use Form 4868 or Form 2350 instead)
- You are seeking an extension to pay estate or generation-skipping transfer taxes (use Form 4768 instead)
- You are requesting a monthly installment payment plan (use Form 9465 or apply through the IRS Online Payment Agreement Application)
- You owe tax, but do not qualify for installment plans or payment extensions (contact your local IRS office to discuss alternatives)
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
2. Complete Header Information
Enter your complete identifying information in the header section:
- For individuals: Enter your legal name, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and current address (legal residence or principal place of business)
- For joint returns or joint deficiencies: List both spouses' names in the same order they appear on the tax return, and enter the SSN or ITIN of the first spouse listed.
- For businesses: Enter the company’s legal name, Employer Identification Number (EIN), and principal place of business address.
- Address format: Use your street address whenever possible. Only use a P.O. box if your post office does not deliver mail to your street address. For foreign addresses, enter information in this order: city, province or state, country, and postal code (do not abbreviate the country name)
3. Complete Part I: Request for Extension
In Part I, provide the following critical information:
- Original due date: Enter the original due date of your tax return (not including any filing extensions already granted) OR the payment due date shown on your deficiency notice or tax bill
- Proposed payment date: Enter the date you propose to pay the tax in full
- Tax amount owed: Specify the exact dollar amount of tax you cannot pay without undue hardship
- Tax type selection: Check only ONE box:
- “The tax shown or required to be shown on Form ___” (enter the specific form number and tax year or fiscal year ending date), OR
- “An amount determined as a deficiency on Form ___” (enter the form number from your notice of deficiency)
4. Complete Part II: Reason for Extension (Undue Hardship Explanation)
Provide a detailed narrative explanation of the undue hardship that will result if your application is denied. This is the most critical section of your application.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Requirements for undue hardship:
- You must establish more than mere inconvenience to you personally or your business operations
- You must demonstrate that you will sustain substantial financial loss if forced to pay on the original due date
- Examples of substantial financial loss include the forced sale of property at a reduced price, liquidation of business assets below market value, inability to meet payroll or critical business obligations, or financial circumstances that would lead to business closure.
What will result in denial:
- General statements like “I cannot afford to pay” or “this will cause me hardship” without specific supporting details
- Vague claims without documented financial evidence
- Failure to explain why alternative payment arrangements (such as borrowing or liquidating non-essential assets) are not viable options
If additional space is needed, attach a separate sheet with your continued explanation.
5. Compile Part III: Supporting Documentation
You must check both boxes in Part III and attach the required documentation, or your application will not be accepted:
Required Documentation:
- Asset and liability statement: Prepare a complete statement of all your assets and liabilities as of the end of the last month before filing Form 1127. This statement must include:
- Both book values and current market values for all assets
- Clear indication of whether any securities are listed (traded on public exchanges) or unlisted
- All liabilities, including loans, mortgages, credit obligations, and other debts
- Income and expense records: Provide an itemized list of all income received and expenses paid for each of the three calendar months immediately preceding the tax due date. Include:
- All sources of income (wages, business income, investment income, etc.)
- All expenses by category (housing, utilities, business expenses, debt payments, etc.)
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Documentation should be detailed enough for the IRS to evaluate your actual financial condition.
6. Sign and Date the Form
All applicable parties must sign and date Form 1127 under penalties of perjury:
- Individual filers: You must sign and date the form
- Joint returns or joint deficiencies: Both spouses must sign and date the form
- Preparer signature: If someone other than the taxpayer prepared the form, that preparer must also sign, date, and complete the preparer information section
7. File at the Correct Address
Submit the completed Form 1127 with all supporting documentation to the appropriate IRS address:
For most tax types:
File with the Internal Revenue Service (Attn: Advisory Group Manager) for the area where you maintain your legal residence or principal place of business. Consult IRS Publication 4235 (Collection Advisory Offices Contact Information) to find the correct address for your geographic area.
Exception for gift tax:
If the tax due is a gift tax reportable on Form 709 or Form 709-NA, send Form 1127 to:
Department of the Treasury
Internal Revenue Service
Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
Extension Period Limits And Restrictions
Maximum Extension Periods
- For taxes shown on a return: Extensions generally cannot exceed 6 months from the original return due date (excluding filing extensions). However, if you are out of the country, an extension longer than 6 months may be granted (except for taxes under IRC sections 4981, 4982, and 5881)
- For deficiency amounts: Extensions are generally limited to 18 months from the deficiency payment due date. In exceptional circumstances, an additional 12-month extension may be granted (total of 30 months)
When Extensions Will Be Denied
An extension to pay a deficiency will NOT be granted if the deficiency resulted from:
- Negligence in tax reporting
- Intentional disregard of tax rules and regulations
- Fraud with intent to evade tax
Interest, Penalties, And Payment Obligations
Interest Accrual
Interest on unpaid tax accrues from the original return due date (or deficiency owing date) and continues until the tax is paid in full, regardless of whether an extension has been granted. An extension of time to pay does not stop interest from accruing.
Penalty Provisions
Penalties may be imposed if you fail to pay the tax within the approved extension period. Even with an approved extension, you remain responsible for paying the tax before the extended deadline expires.
Payment Responsibility
You must pay the tax before the extension period ends. Do not wait to receive a bill from the IRS—proactively make payment by the extended due date to avoid additional penalties.
Timing And Filing Deadlines
File Form 1127 and supporting documentation as soon as you become aware of a tax liability or deficiency you cannot pay without undue hardship:
- For tax shown on an upcoming return: Form 1127 must be received by the IRS on or before the original due date of that return (not including filing extensions)
- For deficiency amounts: Form 1127 must be received on or before the payment due date indicated in your tax bill or notice of deficiency.
Early submission is recommended to allow adequate time for IRS review and decision before the original payment deadline.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
