I'm concerned because my check payment to the IRS has not been cashed yet. What should I do?

You may call 1-800-829-0922 and ask an IRS representative if the payment has been credited to your account. If it has not, you may choose to place a stop-payment on the original check and reissue the payment.

1.5 IRS Procedures: Collection Procedural Questions I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?

You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing severe or unusual economic hardship. Refer to Tax Topic 204, Offers in Compromise, for additional information.

References:

• Tax Topic 204, Offers in Compromise

Is there any special assistance available on unresolved tax matters which are creating a hardship?

If you are suffering, or about to suffer a significant hardship because of the way Internal Revenue laws are being carried out, you may ask for special help from the IRS' Taxpayer Advocate Program (formerly Problem Resolution Office). You may reach that office by dialing 1-877-777-4778 (1-877-PRP-IRSU).

References:

• Tax Topic 104, Taxpayer Advocate Service - help for problem situations

I owe money this year. Who do I make the check out to?

If you pay by check or money order, make it out to the "United States Treasury." Please show your correct name, address, social security number, daytime telephone number, and the tax year and form number on the front of your check or money order. Double check to make sure that you have printed your social security number correctly and that it matches the one used on your income tax return.

Enclose your payment with your return, but do not attach it to the form. If you received Form 1040-V, Payment Voucher, use it to send your payment to the IRS. This will help us process your payment more accurately and efficiently. Follow the instructions that come with the form.

You can also pay part or all of your tax by using a credit card (American Express Card®, MasterCard®, or Discover Card®). There are two credit card processors (also referred to as service providers) which offer this service: Official Payments Corporation and PhoneCharge, Inc. Both providers will charge you a convenience fee using a tiered fee schedule which can be found on their web sites. The IRS will not receive this fee. You can look up the amount of the convenience fee at http://www.official payments. com or, if you choose to use PhoneCharge Inc., at http:www.About1888ALLTAXX.com.

By phone, Official Payments Corporation can be reached at 1-888-272-9829 (1-888-2PAY-TAX) toll-free. Similarly, you may call PhoneCharge, Inc.at 1-888-255-8299 (1-888-All-TAXX). You will be told the amount of the convenience fee during the call. Then, you will have the option to continue or cancel the call. If you decide to continue, you will be given a confirmation number at the end of the call. Make a record of the confirmation number. Do not include the amount of the convenience fee as part of the tax payment. There is nothing to send in when you pay by credit card.

Can I ask to make installment payments on the amount I owe?

Yes. If you cannot pay the full amount due as shown on your return, you may ask to make monthly installment payments. However, you will be charged a one time user fee of $43.00, and you may be charged a late payment penalty unless you can show reasonable cause for not paying the tax by April 15, even if your request to pay in installments is granted. Before requesting an installment agreement, you should consider less costly alternatives such as a bank loan.

To request an installment agreement, send Form 9465 (PDF), Installment Agreement Request with your return or call 1-800-829-0922. You should receive a response within 30 days. For more details on installment payments, refer to Tax Topic 202, What to do if You Can't Pay Your Tax, or Publication 594 (PDF), Understanding the Collection Process.

References:

• Publication 594 (PDF), Understanding the Collection Process
• Form 9465 (PDF), Installment Agreement Request
• Tax Topic 202, What to do if You Can't Pay Your Tax

I just completed my return and find that I owe the IRS money. What should I do?

You should file your return even if you can't pay all of the amount you owe. File by the due date of the tax return and pay as much as possible. By filing on time, you avoid the late filing penalty. By paying as much of the amount you owe as possible, you reduce the amount of interest and late payment penalty that you will owe. If you are unable to pay the full amount of your balance, you can request an installment agreeement to pay the amount due with Form 9465 (PDF) or calling 1-800-829-0922. For more details on interest and penalties, refer to Tax Topic 201, The Collection Process, or Publication 594 (PDF), Understanding the Collection Process.

References:

• Publication 594 (PDF), Understanding the Collection Process
• Tax Topic 201, The Collection Process

What kind of penalties and interest will I be charged for paying and filing my taxes late?

Interest, compounded daily, is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is the federal short-term rate plus 3 percent. That rate is determined every three months.

For current interest rates, go to News Releases and Fact Sheets and find the most recent Internal Revenue release entitled Quarterly Interest Rates.

In addition, if you filed on time but didn't pay on time, you'll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid after the due date, not exceeding 25 percent. However, you will not have to pay the penalty if you can show reasonable cause for the failure. The one-half of one percent rate increases to one percent if the tax remains unpaid after several bills have been sent to you and the IRS issues a notice of intent to levy.

Beginning January 1, 2000, if you filed a timely return and are paying your tax pursuant to an installment agreement, the penalty is one-quarter of one percent for each month, or part of a month, that the installment agreement is in effect.

If you did not file on time and owe tax, you may owe an additional penalty for failure to file unless you can show reasonable cause. The combined penalty is 5 percent (4.5% late filing, 0.5% late payment) for each month, or part of a month, that your return was late, up to 25%. The late filing penalty applies to the net amount due, which is the tax shown on your return and any additional tax found to be due, as reduced by any credits for withholding and estimated tax and any timely payments made with the return. After five months, if you still have not paid, the 0.5% failure-to-pay penalty continues to run, up to 25%, until the tax is paid. Thus, the total penalty for failure to file and pay can be 47.5% (22.5% late filing, 25% late payment) of the tax owed. Also, if your return was over 60 days late, the minimum failure-to-file penalty is the smaller of $100 or 100% of the tax required to be shown on the return.

Also, refer to Tax Topic 653, IRS Notices and Bills and Penalty and Interest Charges.

References:

• Tax Topic 653, IRS notices and bills and penalty and interest charges
• News Releases and Fact Sheets

I received an IRS bill for an amended return I filed. I am not able to pay the whole amount at this time. Will the IRS allow me to make monthly payments?

If you cannot pay the full amount due, you may ask to make monthly installment payments. You may be charged a fee for this arrangement. Penalties and interest will continue to accrue on the unpaid amount until the account balance is paid in full. Refer to Tax Topic 202, What to Do if You Can't Pay Your Tax, for more information.

References:

• Tax Topic 202, What to do if you can't pay your tax
• Form 9465 (PDF), Installment Agreement Request

1.7 IRS Procedures: Extensions I've been told that payment of taxes can be deferred until August. I've also been told that payment is due April 15th and the extension is just for follow-up paperwork. Which is correct? Is it possible to file an extension for payment of taxes due?

If you are unable to file your individual tax return by the due date, you may get an automatic 4-month extension of time by filing Form 4868 (PDF), Application for Automatic Extension of Time to File for U.S. Individual Income Tax Returns, before the due date, usually April 15. By filing this form, you can avoid a late filing penalty. However, this extension does not give you more time to pay the tax you owe. It is only an extension of time to file your return. If you need an extension of time to file, you need to estimate how much tax, if any, you'll owe, and include that payment with your Form 4868.

If you are a U.S. citizen, resident or a member of the armed forces, whose home and main place of business or post of duty are outside the U.S. and Puerto Rico on the return due date, you are allowed an automatic extension until June 15, to file your return and pay any tax due. If you use this automatic extension, you must attach a statement to your return saying that your home and your main place of business or post of duty are outside the U.S. and Puerto Rico on the due date of your return.

References:

• Publication 54 (PDF), Tax Guide for U.S. Citizens and Resident Aliens Abroad
• Publication 17 (PDF), Your Federal Income Tax

If I file for an extension, do I still have to send in any money I think I might owe by the April 15th date, or can I wait until I know exactly what I owe or don't owe and send it in by the extension due date?

If you need an extension of time to file, you need to estimate how much tax, if any, you'll owe on Form 4868 (PDF), Application for Automatic Extension of Time to File for U.S. Individual Income Tax Returns. You do not have to pay the amount of the estimate in order to obtain the extension. However, the extension does not give you more time to pay the tax you owe; it is only an extension of time to file your return. If you owe any amount of tax when you file your return, you will be charged interest on that unpaid balance from the original due date of the return. You will also be charged a late payment penalty if the unpaid balance is more than 10 percent of your actual tax liability unless you have reasonable cause for the failure to pay.

References:

• Publication 17 (PDF), Your Federal Income Tax

I filed an extension in April and still owe the IRS. I want to pay the money before the August deadline to file. Do I need to fill out a form to send in with my check? Where do I send the check? What are the penalties, interest due for not paying by April 15th?

Interest will be assessed from the due date of the return. When you file your return, simply pay the amount due. The IRS will send a notice of the interest due. You will also be charged a late payment penalty if the unpaid balance is more than 10 percent of your actual tax liability unless you have reasonable cause for the failure to pay.

References:

• Publication 17 (PDF), Your Federal Income Tax

1.8 IRS Procedures: Forms & Publications Is there an Offer and Compromise form available? How can I get one?

The Offer and Compromise form you must complete is Form 656 (PDF), Offer in Compromise.

You can get this form by calling 1-800-829-3676 or you may download it at Forms & Pubs off our internet site.

References:

• Publication 594 (PDF), The IRS Collection Process
• Publication 594SP (PDF), Comprendiendo el Proceso del Cobro
• Form 656 (PDF), Offer in Compromise
• Tax Topic 204, Offers in compromise

1.12 IRS Procedures: Refund Inquiries