The term 'undue hardship' refers to a situation where granting an extension of time would be unfair or unreasonable due to the taxpayer's specific circumstances. The Internal Revenue Service (IRS) considers several factors when determining whether an undue hardship exists, including the taxpayer's efforts to file or pay on time, the reason for the request, and the potential harm to the IRS if an extension is granted. Taxpayers should provide detailed explanations and supporting documentation when requesting an extension based on undue hardship.