Form 1127: Application for Extension of Time for Payment of Tax Due to Undue Hardship
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Form 1127: Application for Extension of Time for Payment of Tax Due to Undue Hardship

Struggling to pay taxes on time? Form 1127 can help; it’s used to apply for an extension of time if paying taxes on the due date will cause undue hardship. Learn what types of taxes are covered, when to submit the form, and more.

What is Form 1127?

Form 1127 is used to request an extension of time to pay tax liability or a tax deficiency without causing an undue hardship. An “undue hardship” is more than an inconvenience, and requires that you demonstrate a substantial financial loss would occur if you paid your tax on its due date. Form 1127 should be filed with the Internal Revenue Service (or Department of the Treasury in the case of gift tax) Attn: Advisory Group Manager for the location of your legal residence or principal place of business. See Pub. 4235 for the address of the local advisory group.

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IRS Form 1127 – Who Needs to Fill It Out?

Form 1127 should be filled out by taxpayers who owe any income taxes, self-employment taxes, taxes on non-resident aliens and foreign corporations, taxes on private foundations and certain other tax-exempt organizations, taxes on qualified investment entities, taxes on greenmail, taxes on structured settlement factoring transactions, or gift taxes; or are unable to pay the full amount of any taxes due without causing undue hardship. ‘Undue hardship’ means more than an inconvenience and the filer must provide evidence of substantial financial loss if payment is made on time. Form 1127 must be filed when first aware of a tax liability or deficiency, and either before the due date of the return or the due date for payment indicated on the tax bill. It should then be sent to the IRS advisory group for the area where the taxpayer resides or principal place of business, or if a gift tax is due, to the Department of the Treasury directly.

Step-by-Step: Form 1127 Instructions For Filling Out the Document

Form 1127 is used to request an extension of time to pay taxes when paying the taxes at the time it is due would cause undue hardship, such as a substantial financial loss. Who Should File Form 1127 can be used for income taxes, self-employment income taxes, withheld taxes on nonresident aliens and foreign corporations, taxes on private foundations and certain other tax-exempt organizations, taxes on qualified investment entities, taxes on greenmail, taxes on structured settlement factoring transactions, and gift taxes. When To File Form 1127, and its supporting documentation, should be filed as soon as the tax liability is known, or the tax bill is received. If the tax is to be reported on Form 709, Form 1127 should be sent to Department of the Treasury, Internal Revenue Service, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915. Otherwise, it should be sent to the local IRS Advisory Group Manager (Pub. 4235).

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Below, we present a table that will help you understand how to fill out Form 1127.

Information Required for Form 1127 Details
Eligibility Who should file Form 1127 and for which taxes
Filing Deadline When to file Form 1127 and where to send it

 

Do You Need to File Form 1127 Each Year?

Form 1127 must be filled out if you will owe any of the specified taxes listed such as income taxes, self-employment taxes, taxes on private foundations, taxes on qualified investments, or even gift taxes. It should also be filled out if you receive a notice and demand for payment on any of the specified taxes. The term “undue hardship” means more than an inconvenience, you must show that you will have substantial financial loss if you pay your tax on the due date. Form 1127 must be filed when you are aware of a tax liability or deficiency, either on the due date of the upcoming return or the due date indicated on the tax bill. It should be sent to your local Advisory Group Manager or to the Department of the Treasury if the tax is a gift tax.

Download the official IRS Form 1127 PDF

On the official IRS website, you will find a link to download Form 1127. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 1127

Sources:

https://www.irs.gov/forms-pubs/about-form-1127

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