What To Do If You Owe The IRS
It’s important that you file your tax return on time with the IRS even though you owe and don’t have the money to pay the tax due. If you do owe, there are several ways to pay the tax due to the IRS.
Ways to Pay Now:
- Check or money order
- Electronic funds transfer: To transfer funds electronically, you need to use IRS Direct Pay or EFTPS
- Payment by debit or credit card: The IRS uses several payment processors. All of these charge a flat fee for using a debit card and a percentage fee for using a credit card. These include: (1) Link2GovCorporation, www.pay1040.com (2) Worldpay, Inc., www.payUSAtax.com (3) ACI Payments, Inc., www.fed.acipayonline.com
Ways to Pay Later:
- Additional time to Pay: You could request a short-term additional amount of time to pay in full. To do so, you need to request it by using the Online Payment Agreement at www.irs.gov or by calling 800-829-1040.
- Installment Agreement: You can set up an installment agreement by filing Form 9465 with the IRS. The IRS will inform you within 30 days of its approval. The following fees apply: $31 for direct debit, $130 for standard payment or payroll deduction, and $43 for those with lower income. Your payment plan will default if the IRS doesn’t receive your payment on time, so direct debit is the best method.
- Offer in Compromise: An Offer in Compromise allows taxpayers to settle their tax bill for less than what is owed. However, this option works for only a few taxpayers. If you have very few assets and little monthly income, you may want to check this out to see if you can qualify.
What Happens If You Don’t Pay the IRS:
- Penalties and interest accrue on the balance due until it is paid in full.
- Future refunds can be used to offset the balance of tax due.
- The IRS could file a lien against your property.
- The IRS could seize your bank account or a portion of your wages with a tax levy.
So why wait any longer? We can advise you as to the best way to pay your tax liability to the IRS.
For more information about settling your tax debt with the IRS, contact our office today at (727) 391-7373.