The IRS has released a Fact Sheet reminding taxpayers of the different methods they can use to pay their taxes, particularly if they cannot pay the full amount owed. In that case, the taxpayer should file the return on time and pay as much as possible, which will reduce penalties and interest.
IRS Direct Pay allows the taxpayer to make payments directly from the taxpayer’s bank account. Those who file electronically can elect an electronic funds withdrawal from the taxpayer’s savings or checking account. The Electronic Federal Tax Payment System allows payment of taxes electronically using the internet, or by telephone. A taxpayer can also do a same-day wire transfer from their financial institution.
Alternatives are available for taxpayers who cannot pay their bill in full when they file their returns. Options include a payment plan, such as a short-term payment plan up to 120 days. There is no user fee for a short-term plan. A taxpayer can also request a longer term monthly payment plan or installment agreement.
Another option is an offer in compromise. This is an agreement between the taxpayer and the IRS to settle the taxpayer’s tax debt for less than the full amount owed. Taxpayers should use the IRS’s Offer in Compromise Pre-Qualifier Tool to see if the program is appropriate.
Further information is available at IRS.gov, including forms, publications, and helpful web pages. For further assistance with IRS payments, contact Larson & Company today.