Should you have a balance due the Internal Revenue Service and you cannot pay the full amount of taxes you owe by the April 15th deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. There are also alternative payment options to consider:
Credit Card Payment – The Internal Revenue Service has made arrangements with American Express, MasterCard, Visa or Discover cards. To pay by credit card, contact one of the independent service providers by telephone or at their respective Web site listed below and follow the instructions. Service providers charge a fee based on the amount to be paid.
- Link2Gov Corporation: 888-PAY-1040 (888-729-1040), www.pay1040.com
Official Payments Corporation: 800-2PAY-TAX (800-272-9829), www.officialpayments.com
Extension of Time to Pay – based upon the circumstances, you may qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment.
A short term extension of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers qualifying for an extension of time to pay of 30 -120 days generally will pay less in penalties and interest than if the debt were repaid under an installment agreement with the IRS.
Installment Agreement – The IRS may allow you to pay any remaining balance in monthly installments through an installment agreement. You can apply for an IRS installment agreement using our Web-based Online Payment Agreement application on IRS.gov. Another alternative is to attach a Form 9465, Installment Agreement Request, to the front of your tax return.
The IRS charges a $105 fee for setting up an installment agreement. The fee is only $52 if you pay via direct debit. In some instances if your income is below a certain level (see Form 13844), you may qualify for a reduced fee of $43.
Interest will be added to any amounts due plus a late payment penalty on the unpaid taxes for each month or part of a month, after the due date that the tax is not paid.
There is also in addition to the failure to pay penalty if you do not make arrangements otherwise for an installment agreement, a penalty for failure to file your return by the due date — including extensions — you may have to pay a failure-to-file penalty.
The Online Payment Agreement application process provides immediate notification regarding the approval of your request for an installment agreement arrangement with the Internal Revenue
Service. There may be additional requirements to provide paperwork or speak directly with an IRS official to determine eligibility for an installment agreement or short term extension to pay.
Should you be required to provide additional information, or speak with an IRS official an address and/or telephone number that can be used to reach the appropriate IRS office will be provided online.
Bottom line, it is best to make arrangements to file your return timely, or file an extension for filing. All taxes that are due must be paid no later than April 15 unless alternative payment arrangements have been made with the Internal Revenue Service directly, or an installment agreement application filed by the due date. Filing an application does not necessarily mean approval.