FS-2024-16: IRS offers several payment options, including help for those struggling to pay

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IRS Newswire April 19, 2024

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Issue Number:    FS-2024-16

Inside This Issue

IRS offers several payment options, including help for those struggling to pay

Taxpayers have a variety of options to consider when paying federal taxes. Electronic payment options are the best way to make a tax payment.

For taxpayers who cannot pay in full, the IRS encourages them to pay what they can and explore a variety of payment options available for the remaining balance, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge by law.

The IRS also urges taxpayers not to wait to respond to a notice. Notices and letters provide taxpayers with information about the actions they need to take. Many notices have QR codes that help direct taxpayers to their online tax accounts. In addition, these letters inform the taxpayer of the status of their unpaid balance, options for resolution and their rights in the collection process.

For taxpayers who can’t pay their tax bill in full, the IRS offers several options to help them meet their obligations. IRS payment options are available at IRS.gov/payments.

Options for paying electronically

  • Direct Pay – Individual taxpayers can use Direct Pay for up to two payments each day. Direct Pay lets taxpayers pay online directly from a checking or savings account for free and schedule payments up to 365 days in advance. They’ll receive an email confirmation of their payments.
  • Electronic Federal Tax Payment System (EFTPS) – The best payment option for individual taxpayers or businesses making large payments is the EFTPS, which allows up to five payments per day. The system requires enrollment. Taxpayers can schedule payments up to 365 days in advance and opt in to receive email notifications about their payments.
  • Electronic funds withdrawal – Individual taxpayers and businesses can pay when they file electronically using tax software online. If they’re using a tax preparer, they can ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.
  • Payment processor – Individual taxpayers and businesses can choose to pay with a credit card, debit card or digital wallet through a payment processor. Although processing fees apply, no part of those go to the IRS.
  • IRS Online Account – Individual taxpayers have the option to create and sign into an IRS Online Account to pay from there. Online Account allows taxpayers to view:
    • The amount they owe.
    • Payment history and any scheduled or pending payments.
    • Payment plan details.
    • Digital copies of select notices from the IRS.

Paying by check, money order or cashier’s check

If they’re paying an income tax liability that’s currently due without an accompanying income tax return, taxpayers paying by check, money order or cashier’s check should include Form 1040-V, Payment Voucher, with the payment.

  • Mail the payment to the correct address by state or form. Don’t send cash through the mail. Indicate on the check memo line the specific tax year to which the IRS should apply the payment.
  • Those paying when filing their current year’s income tax return shouldn’t staple or paperclip the payment to the return. For more information go to Pay by Check or Money Order on IRS.gov.

Paying by cash

Individuals and businesses preferring to pay in cash can do so at a participating retail store. There’s a $500 limit per payment, and processing fees apply.

Other options

Most taxpayers also have the following payment options if they can’t pay in full now:

  • Payment plans –Taxpayers who owe but can’t pay in full don’t have to wait for a tax bill to set up a payment plan (or installment agreement) to pay off an outstanding balance over time. Most taxpayers qualify and can set up a payment plan through the Online Payment Agreement (OPA) tool, as well as using IRS text or voice bots. Once taxpayers complete the online application, they receive immediate notification of whether the IRS has approved their payment plan. Taxpayers can set up a plan using OPA in minutes. There’s no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans
  • Offer in Compromise – An Offer in Compromise allows qualifying taxpayers to settle their tax liabilities for less than the total amount they owe. To help determine their eligibility, they can use the Offer in Compromise Pre-Qualifier tool.
  • Temporarily Delaying Collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves. Penalties and interest continue to accrue until the taxpayer pays the full amount.

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