Tax bills from the IRS should not be ignored. A delay in payment can lead to more interest and penalties that need to be paid. Below are five tips from the IRS to avoid extra charges:

1. Pay electronically Paying your bill(s) with the IRS electronic payment option is quick, accurate, and most importantly, safe.  You can also obtain a record of your payment. Electronic payment options include:

IRS Direct Pay and EFTPS are free services. If you choose to pay your bill by credit or debit card, the company that processes your payment will charge a fee.

2. If you can’t pay in full, make monthly paymentsMost individuals and some small businesses can apply for a payment plan using the IRS Online Payment Agreement Application or Form 9465, Installment Agreement Request. You can also call the IRS at 800-TAX-FORM (800-829-3676) to receive this form by mail.

3. Direct debit pay plan This is a lower-cost, hassle-free way to pay your bill(s). Other plans charge $120, whereas direct debit pay plan is $52. With this plan, you pay each month automatically from your bank account. This plan requires no checks to be written, no missed payments, and no reminder notices from the IRS. For the rules of this plan, check out the Payment Plans, Installment Agreements.

4. Offer in CompromiseAn Offer in Compromise (OIC)  allows you to settle your debt with the IRS for less than the full amount that you owe. This is an option if you can’t pay your tax bill(s) in full and/or if making the full payment would result in financial hardship. To learn if you qualify for an OIC, use the IRS Offer in Compromise Pre-Qualifier Tool.

5. Check or money order Pay by check or money order with the check payable to the U.S. Treasury. Mail your check to the address listed on your notice. Be sure to include the following:

  • Your name, address, and daytime phone number
  • Your Social Security number of employee ID number if making payment for a business tax bill
  • The tax period and related tax form (i.e. 2013 Form 1040, for your individual tax bill)

To learn more about the IRS collection process or if you have any questions, please feel free to contact us or the IRS collections process.

Source: IRS Special Edition Tax Tip 2014-14