November 03, 1999
IRS Expands Credit Card Payments for Next Year
WASHINGTON - After a successful test of accepting
credit card payments this year, the Internal Revenue Service will expand their
availability to individuals seeking automatic extensions of time to file returns and those
making estimated tax payments for tax year 2000. There will also be new opportunities to
file and pay taxes electronically.
The IRS offers these electronic payment options through partnerships with
private industry, including credit card processors and tax preparation software
developers. More than 129,000 people paid their federal taxes by credit card or direct
debit transactions during the 1999 pilot.
"Weve been pleased with the positive response from taxpayers to our
electronic payment alternatives, and with the private sector partnerships which have made
these options possible," said Robert E. Barr, IRS Assistant Commissioner for
Electronic Tax Administration. "Making the whole tax process -- filing, signing and
paying -- fully electronic advances our goal of transacting 80% of our business
All individuals will again be able to use the pay-by-phone system to charge tax
payments to American Express, Discover or MasterCard accounts. This system will accept
three types of payments:
- the balance owed on a 1999 return;
- a projected balance of 1999 taxes due on a request for an automatic extension of
time to file; or
- an estimated tax payment for tax year 2000.
Taxpayers charging an automatic extension or estimated tax payment will not
have to file the associated paper Forms 4868 or 1040-ES. The phone system, operated by
Official Payments Corporation (formerly U.S. Audiotex), of San Ramon, Calif., will open
January 14, 2000. The estimated tax payment option will become available March 1, 2000.
Three tax software developers will offer e-file and pay combinations for
individuals. In these programs, the credit card payment information is part of the
electronic return filed.
Intuit, of Mountain View, Calif., which piloted this option for personal
computer users last year, will expand its program to people using its Web filing service
and to tax preparers using its professional series software. The Intuit programs will
allow tax payments only with the Discover Card.
Nelco, an e-filing transmitter and software developer located in Green Bay,
Wisc., will include an option for payments using an American Express Card for both online
filers and taxpayers e-filing through tax professionals.
Orrtax Software, of Bellevue, Wash., will partner with Official Payments Corp.
to allow charges to the same three cards used on the phone system to be included in
returns e-filed through tax professionals.
The IRS does not set or collect any fees for credit card payments, but the
private sector partners may impose convenience fees, based on the tax amounts charged. All
individuals who file electronically -- including those using TeleFile, the file-by-phone
system -- will be able to have the balance due debited directly from their bank accounts.
Many people already use such direct debits for their mortgages, auto loans or utility
bills. Last year, the IRS limited direct debits to computer-filed returns.
Previous | Next
1999 IRS News Releases | News Releases Main | Home