IRS Payment Options- Pay on Time to Avoid IRS Penalties & Interest

The deadline approaches, Taxes must be paid to the IRS by April 15 if you want to avoid failure-to-pay penalties from the IRS. If you need an extension of time to file your taxes, you can request one. But remember, an extension of time to file is not an extension of time to pay your taxes.

Remember, Filing and Paying on time Saves Money

If you can't afford to pay the full amount you owe the IRS, file your return and pay as much as you can by April 15. Interest and failure-to-pay penalties are due only on the unpaid balance.

A Tip for Our Men in Uniform

Members of the military and some others currently serving in combat zones can wait until after April 15 to file and pay. Those eligible get the extra time penalty- and interest-free without having to ask for it. Normally, the filing and payment deadline is postponed until 180 days after the service member leaves the combat zone. Victims of recent natural disasters, listed on, also have extra time.

Paying by Mail

Taxpayers may also pay any taxes by check made out to the “United States Treasury.” Include Form 1040-V, Payment Voucher, along with the payment and tax return. If you have already submitted your tax return but still need to pay all or some of the balance, you may mail the check to the IRS with Form 1040-V.

Installment Agreements and Online Applications
If you can’t pay in full by April 15, consider applying for an installment agreement.

An installment agreement allows you to pay any remaining balance in monthly pieces. Attach Form 9465, Installment Agreement Request, to the front of your tax return to request this. You must show the amount of your proposed monthly payment and the date you intend to pay each month. The IRS charges $105 for setting up the agreement, or $52 if the payments are deducted directly from your bank account. Qualified lower-income taxpayers pay $43.

You will be required to pay interest plus a late payment penalty on the unpaid taxes for each month or partial month after the due date.

Offers in Compromise
This filing season the IRS has supposedly given its personnel additional flexibility on offers in compromise for struggling taxpayers. However, this is still the hardest "payment option" to qualify for with the IRS.

According to the IRS, their employees will be permitted to consider a taxpayer’s current income and potential for future income when deciding on an offer in compromise. The standard practice is to judge an offer amount on a taxpayer’s earnings in prior years. Try to take advantage of these news steps and see if you qualify to settle your tax Debt with an Offer in Compromise. But remember, nothing is ever easy when it comes to negotiating with the IRS.