IRS says its sympathetic to those who owe

If you owe taxes, but don't have the money to pay the bill by today's deadline, you'll find some sympathy at the Internal Revenue Service.

"There's a big issue this year with people who can't pay," said Martin Press, a tax lawyer in Fort Lauderdale, Fla.

One reason is that the unemployment spike and still struggling economy have resulted in more people pulling money out of Individual Retirement Accounts and 401(k) plans. Now they have to pay taxes and penalties on those funds.

But the IRS will work with you if you're in that spot, and if you take the right steps. 

1. File your return.
Failure to pay produces penalties and interest charges, which are compounded daily. If you can't finish your return, file for an extension to avoid penalty. And try to pay part of your bill since charges only apply on the unpaid balance.

2.  Don't pay taxes on credit.
The interest rate on your credit card is likely much higher than the 4 percent interest rate the IRS will charge.

3. Set up an installment plan.
If you owe less than $25,000, you can request an installment plan online at irs.gov. You can also print the form and send in a request by mail. There's a $105 setup fee, or $52 if the payments are deducted directly from your bank account.

4. Seek professional guidance.
The IRS also offers to settle tax debts for less than what's owed, but Press said taxpayers should avoid these "offers in compromise" until they've discussed them with a tax professional.