It would be of benefit to Dallas residents if they all knew that the Internal Revenue Service gives taxpayers a host of ways to pay delinquent federal taxes. IRS Collection Representatives are capable of discussing a range of payment plans, from a free online service to installment agreements that come with extra user fees.
While the IRS can provide information on payment options, the agency is generally not the one to initiate a discussion regarding those options. Delinquent taxpayers must set a plan in motion. Taxpayers may opt for a monthly installment plan. A one-time $105 user fee is attached to IRS plans for monthly installments, payable with and above the first due payment. Payments are flexible, but sending the highest payment affordable to the IRS is advisable. The higher the monthly amount paid, the sooner the debt is cleared. Stretching out the debt over a longer time accumulates more interest.
Although asking an employer to become involved in an IRS tax situation means revealing personal details, it is helpful for some taxpayers to ask for wage garnishment. A paycheck deduction for taxes is a convenience that does not require a taxpayer’s regular attention.
The same is true for an IRS direct debit agreement. Tax installments are deducted monthly and automatically from a taxpayer’s checking account. Unlike writing a check each month, choosing the direct debit method leaves no opportunity for payments to be forgotten or to get lost in the mail.
The direct debit option is especially helpful for certain taxpayers involved in tax lien situations. It is possible to have a lien withdrawn by agreeing to pay the IRS directly from a bank account. Qualifications for the program do not include all taxpayers.
Partial payment agreements allow some delinquent taxpayers the opportunity to pay what they can afford. Taxpayers who qualify undergo a full financial IRS examination to make sure no other borrowing or asset-selling options exist to satisfy the debt.
The easiest way for many taxpayers to pay the IRS is through its free Electronic Federal Tax Payment System. It is the method many taxpayers already use to file taxes, but can also be employed by those who owe taxes from the past.
Source: The Examiner, “There’s more than one way to pay your taxes, IRS says,” Jay Petrillo, Nov. 3, 2011