This article was last edited on February 16, 2016. For updated information on paying your tax bill, visit How to Pay Your Tax Bill.
SOURCE: IRS Special Edition Tax Tip 2014-14
If you get a tax bill from the IRS, don’t ignore it. A delay may cost you more in the long run. The longer you wait, the more interest and penalties you may have to pay. Here are five tips to help you avoid those extra charges:
Pay electronically. Using an IRS electronic payment to pay your tax is quick, accurate and safe. You also get a record of your payment. Your options include:
- IRS Direct Pay
- Electronic Federal Tax Payment System
- Credit or debit card
Pay monthly if you can’t pay in full. If you can’t pay all at once, apply for a payment plan. Most people and some small businesses can apply using the IRS Online Payment Agreement Application on IRS.gov. You can also apply for a plan using Form 9465, Installment Agreement Request. The best way to get the form is from the IRS.gov website. You can also call the IRS at 800-TAX-FORM (800-829-3676) to get it by mail.
Check out a direct debit payment plan. A direct debit payment plan is the lower-cost hassle-free way to pay. The set-up fee is less than other plans – $52 instead of $120. With this type of plan, you pay each month automatically from your bank account. There are no reminder notices from IRS, no missed payments and no checks to write and mail. For more on these rules see the Payment Plans, Installment Agreements page on IRS.gov.
Consider an Offer in Compromise. An Offer in Compromise allows you to settle your tax debt with the IRS for less than the full amount. An OIC may be an option if you can’t pay your tax in full. It may also apply if full payment will create a financial hardship. To see if you may qualify and what a reasonable offer might be, use the IRS Offer in Compromise Pre-Qualifier Tool.
Pay by check or money order. Make your check or money order payable to the U.S. Treasury. Be sure to include:
- Your name, address and daytime phone number
- Your Social Security number or employer ID number if business tax
- The tax period and related tax form, such as “2013 Form 1040”
Mail it to the address listed on your notice. Do not send cash in the mail.
Find out more about the IRS collection process on IRS.gov.