You can pay your
tax liability in full by sending a check or money order, made out to
"Treasury Department" in the amount of your outstanding balance and
include your social security number. For additional information about
Ensuring Proper Credit of Payments, refer to Topic 158. In addition, you
can pay your tax liability by credit card by calling 1 (800) 272–9829 or
1 (888) 729–1040. You can consider financing the full payment of your
liability through loans, such as a home equity loan from a financial
institution. The unpaid balance is subject to interest that is
compounded daily and a monthly late payment penalty, It is in your best
interest to pay your tax liability in full as soon as you can to
minimize the amount of interest and penalty charged. The interest rate a
bank charges is usually lower than the combination of interest and
penalties imposed by the Internal Revenue Code. Full payment will stop
any further collection notices.
If you cannot pay in full either directly or through the use of loans or
credit cards, the IRS offers you partial payment options through an
installment agreement. There are three forms of agreements: direct debit
from your bank account, payroll deduction from your employer, or routine
installment agreement. Your payment amount is based on your ability to
pay and should be an amount that can be maintained over the lifetime of
the installment agreement. Direct debit or payroll deduction installment
agreements provide you with the opportunity to make timely payments
automatically and therefore reduce the possibility of defaulting the
agreement.
To request an installment agreement, whether you are filing the return
or have received a bill, you can submit Form
9465 (PDF), Installment Agreement Request, or your own written
request for a payment plan, attached to the front of your return or
bill. You should specify the amount you can pay and the day you wish to
make your payment each month. The IRS will respond to your request,
usually within 30 days, as to whether your request is approved, denied,
or if additional information is needed.
If the agreement is approved, a one-time user fee of $43 will be charged
and deducted from the first payment. For direct debit installment
agreements, you will still need to submit Form 9465 as well as staple a
voided check to the form to initiate the automated withdrawal of the
payment. To initiate a payroll deduction installment agreement, you need
to submit the payroll deduction agreement, Form 2159, which also needs
to be completed by your employer. Remember, penalties and interest will
be added to the balance due even if an installment agreement is
approved. For further information about penalties and interest, see
Alternative Payment Options Truth in Lending.
It is important not to ignore an IRS notice. If you do not make payments
or other arrangements to pay the amount you owe in full, we may take
collection action which could include the filing a Notice of Federal Tax
Lien, serving a Notice of Levy or offset of a tax refund. Refer to
Topic 201 for information about
"The Collection Process".
If you are unable to make any payment at this time, call 1 (800)
829–1040 to receive assistance. If we determine that you cannot pay any
of your tax debt, we may temporarily delay collection until your
financial condition improves. In order to assist you, be prepared to
provide pertinent financial information from documents you should have
available to you during the call, such as current pay stubs, rental
agreements or mortgage statements, and car lease/loan statements.
For more information about installment agreements, please see
www.irs.gov.
You have rights and protections throughout the collection process. If
you would like some printed information on "your rights as a taxpayer,"
making arrangements to pay your bill, installment agreements, and what
happens when you take no action to pay, refer to Publication 594 (PDF),
The IRS Collection Process, and Publication 1, Your Rights as a
Taxpayer.
Related Articles:
Government Tax Lien
Tax Collection
Tax Payment Options
Offers In Compromise
