What if you can't pay your taxes on time

Фото: Depositphotos

If you are unable to pay the taxes due from you by the date you filed your tax return (in 2017, this is April 17), interest and monthly late fees are charged on your debt. A fine is also charged for failure to file a tax return, so it should be filed on time, even if you are unable to pay the tax in full.

For the convenience of customers United States Revenue Service It offers several ways to pay taxes or pay off debt if it occurs.

Electronic payment Is a convenient way to pay federal taxes online, by phone, or from a mobile device. With various options for electronic payments can be found on page Payments (payments) and in the mobile app IRS2Go app.

You can pre-schedule a payment and receive a confirmation after sending the money. Electronic payment is absolutely safe, because the US Tax Administration uses the most advanced coding technology. This is a simple, easy, secure and much faster process than paying by mail by check or money order.

IRS Direct Pay is a secure service that you can use for free to make payments directly from your checking or savings account. You can use the Direct Pay service to make payments on your 1040 series electronic declarations for the current and previous years. You can use the Direct Pay service to view the current status of your payments using the Look Up a Payment viewer. With this tool, you can change or cancel your payment until the 2 business day remains until the due date.

In case you decide to pay by mail, attach a check or money order to a copy of your tax return or your notice. Write a payment document on the recipient of the US Treasury (United States Treasury) and indicate on its front side your full name, surname, address, phone number where you can be caught in daytime, social security number, tax period and form number ( for example, the 1040 form for 2016 year (2016 Form 1040)).

If you are unable to pay in full, you should pay the maximum amount possible to reduce the interest that accrues on your debt. The information needed to ensure your payment is correctly accounted for can be found under - 158 Theme.

You should also consider paying off the full amount of your tax debt using loans, for example, a loan secured by residential property issued by a financial institution, or paying by credit card.

Interest rates or other fees charged by the bank or financial institution that provided you with a credit card are usually lower than the total amount of interest payments and interest charged in accordance with the rules of the US tax laws.

Delay of up to 120 days

In the event that you cannot pay the full amount immediately, the US Internal Revenue Service offers an additional deferment of up to 120 days for full repayment of the debt. With such a payment in full, an additional fee is not charged, but at the same time, interest and other appropriate penalties continue to accrue to the amount of the debt until full repayment. You can enter into such an agreement by using “Application for electronic payment agreementOr by calling: 800-829-1040 (for individuals) or 800-829-4933 (for commercial organizations).

Installment Agreements

If you cannot pay the full amount of tax arrears immediately or within 120 days, "Installment Agreement»(Installment agreement) allows you to make a series of monthly payments over a certain period of time. To submit a request for an installment agreement, use the “Application for electronic payment agreement"(OPA) or complete the 9465 Form (Form 9465, Installment Agreement Request) and mail it to the IRS. The US Internal Revenue Service offers a number of options for making monthly payments:

• Direct debit of your bank account;
• Withholding wages through your employer;
• Payment through the Electronic Federal Tax Payment System (EFTPS);
• Payment by credit card by phone or online;
• Payment by check or money order;
• Payment in cash or through a partner store.

When you enter a standard installment payment agreement or payroll withholding agreement, the United States Revenue Service (IRS) charges a one-time fee of $ 225. If you prefer a payment option when you enter into an agreement by directly debiting your bank account, the fee is $ 107. If you use the application OPA to apply for installment payments, you must pay a user fee of $ 149. If you use the application OPA to apply for installment payments and prefer to pay by direct debit, the user charge is $ 31. Note: The fee for changing the structure of the current installment payment agreement or for its renewal is $ 89, regardless of income level or method of payment.

Taxpayers whose income does not exceed 250% of the subsistence minimum established by the US Department of Health and Welfare may apply to reduce the fee to $ 43. Such an application is filed on the Form 13844 (Form 13844, Application For Reduced User Fee).

• In case you have not filed your tax return yet, you can file an 9465 Form (Form 9465, Installment Agreement Request) or attach to the first sheet of your tax return a written request for a phased payment plan indicating the amount and date of monthly payments.
• If you filed a tax return, but you cannot complete the payment, you can submit a request for an agreement on the payment of the current tax debt in installments, using the link to the request for an electronic payment agreement (OPA). Even if the US Internal Revenue Service (IRS) has not yet sent you a bill for payment, you can enter into an agreement for a predetermined amount, stating the debt stated in your tax return or debt statement in response to a request issued by the OPA system.
• If you cannot make a full payment after you receive a bill for payment from the US Internal Revenue Service (IRS), you can request an agreement to pay your current tax debt in installments using the electronic payment agreement request tool (OPA). You can also file an 9465 Form or attach a written request for a phased payment plan to the first sheet of your tax return.
• You can also apply for an installment payment agreement by phone, call the toll-free number on the invoice, or, if you have not received the invoice, call: 800-829-1040 (for individuals) or 800-829-4933 (for commercial organizations).

Your request for an installment payment agreement will be considered only after you have fulfilled all the tax filing and payment requirements. Bankruptcy taxpayers are not entitled to conclude such an agreement. You must specify the amount you are able to pay and the date of the month in which you wish to make the monthly payment. You must set this amount based on your ability to pay it, and you should be able to pay it monthly to avoid breach of agreement. You can choose to pay any day of the month from 1-th to 28-th number. The US Internal Revenue Service is awaiting receipt of funds exactly at that the date you specify, so make sure that when choosing the date you take into account the time required for mailing (10 days). Usually, the US Internal Revenue Service will respond to your request, usually within 30 days, and tell you whether your request has been approved or denied, or to provide additional information.

Installment payment agreements by direct debiting and withholding of wages give you the opportunity to make timely payments in automatic mode and reduce the likelihood of violation of the terms of the agreement.

To conclude an installment payment by direct debiting, you must provide your current account number and the route number of your bank in order to provide automatic payment from your account.

For registration of an agreement on automatic withholding payments from salary submit the 2159 Form (Form 2159, Payroll Deduction Agreement). Your employer completes the 2159 form because it is an agreement between him, you, and the United States IRS. In some cases, the US Internal Revenue Service may draw up a standard installment payment agreement for you and convert it into a payroll withholding agreement after receiving the completed 2159 Form from your employer.

See the “Payment schedules, installment payment agreements».

Proposal for a compromise agreement

In case you are not able to repay the debt in installments, you can apply for a conclusion compromise agreement (Offer in Compromise, OIC). An agreement in compromise is an agreement between you and the IRS that resolves the taxpayer's tax liability through payment of an agreed upon reduced amount. Before such an agreement can be considered, all filing and debt payment requirements must be met as of the date of application. Taxpayers in bankruptcy proceedings are not entitled to apply for a compromise agreement. You can check whether you qualify for a compromise agreement and ensure that you are using a valid proposal form by using the Compromise Eligibility tool (Offer in Compromise Pre-Qualified). Refer to the 204 Topic for more information on the offer of a compromise agreement.

Temporary suspension of tax debt collection

If you cannot pay any amount due from you due to the fact that paying it will not allow you to pay your basic living expenses, you can ask the US Internal Revenue Service to suspend debt collection until you can pay it. In the event that the US Internal Revenue Service determines that you are unable to make any payments due to a difficult financial situation, it may temporarily suspend debt collection, recognizing that it should not be recovered from you at this time. until your financial situation improves. If your debt is not subject to recovery at the moment, it does not mean that it is canceled. This means that the US Tax Administration has determined that you are not able to pay it at the moment. Interest charges and late payment penalties will continue to accumulate over the period of suspension of debt collection until it is fully repaid. You may be asked to complete an Information Collection Collection Statement Statement. 433-F, Form 433-A or Form 433-B) (PDF) and provide proof of your financial position (you can provide information about your assets and monthly income and expenses) before approving your request for a suspension of debt collection. The US Internal Revenue Service may temporarily suspend certain debt collection activities, such as tax collection (see Theme 201) until such time as your financial situation improves. However, they may issue a Property Arrest Notice for non-payment of federal taxes (see Theme 201) for the period of suspension of collection of your debt. Call the phone number listed on your account to discuss this possibility.

Responding to a Notice from the US Department of Revenue

It is extremely important to respond promptly to the notice you received from the IRS. In the event that you do not fully pay your tax arrears or do not enter into an alternative payment arrangement, the Internal Revenue Service has the right to take action to collect the payment. See section Theme 201 on issues related to the “Collection Process”.

In the event that you are unable to make any payments at the moment, prepare your financial documents (for example, paycheck stubs, a lease agreement, mortgage documents, a car lease / loan agreement, utilities payment documents) and Ask for help by calling: 800-829-1040 (for individuals) or 800-829-4933 (for commercial organizations).

You have rights and protections throughout the debt collection process: see “Taxpayer Bill of Rights(Taxpayer Bill of Rights) and Publication No. 1Your taxpayer rights"(Your Rights as a Taxpayer).

Read also on ForumDaily:

Who and how can get a tax credit with a child or a dependent

When, how and where to file a tax return

The United States Revenue Service received the right to cancel citizens' passports for tax evasion

The US Internal Revenue Service will hire private collectors to collect debts

5 programs for filling out a tax return: an overview

6 free ways to report to the Tax Administration

What incomes do you need to file a tax return for 2016 year

10 facts about the upcoming tax season

How does the USA pay taxes paid abroad?

Should you file a tax return?IRS

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.