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William Perez

What if You Owe Tax on Your 2012 Return

By October 10, 2013

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If you're filing a tax return by the October 15th deadline and you have a balance due to pay the IRS, here's different ways to pay that balance due.

Mail in a check to the IRS. Even though the IRS is currently shut down, the agency is maintaining a small staff to receive tax payments. Mail your check to the proper address: there's one set of addresses just for payments, and there's another set of addresses if your mailing a tax return along with a payment. Be sure to make your check payable to the United States Treasury, and indicate your Social Security number, tax year and tax form in the memo field.

Set up an electronic payment in your tax software. Most tax software programs allow a person to enter their bank account information for electronic funds withdrawal. The IRS will process your payment after receiving your electronically-filed tax return.

Send an electronic payment through EFTPS.gov. This Web site, run by the Treasury Department, processes electronic payments from a bank account for various types of tax payments. If you are already set up on EFTPS, you can log in and schedule a payment. If you're not set up on EFTPS, however, you'll first need to register and wait to receive login information from the Treasury Department by mail to validate your registration. It's not immediately clear if the Treasury is sending out enrollment information during the shut down.

Set up an installment agreement if you need extra time to pay. To request an installment agreement, you fill out Form 9465 (pdf). This form can even be included with an electronically-filed tax return, as long as you don't have an outstanding balance with the IRS for other years. Or, the Form 9465 can be mailed in to the IRS. It may take some time for the IRS to process installment agreements, and so you might want to begin making monthly payments by check. Installment agreements can also be set up on the IRS Web site using their Online Payment Agreement application. Under the terms of their Fresh Start Initiative, the IRS is automatically approving installment agreements where the outstanding balance owed is $50,000 or less and the balance will be paid off in 72 months or less. Also, be aware that the IRS charges a fee to set up an installment agreement: $52 for installment agreements paid by direct debit from a bank account, or $105 for installment agreements without direct debit.

If you already have an existing installment agreement, filing a return with a balance due will default your current installment agreement and you'll need to set up a new installment agreement. This process is called re-instating an installment agreement. This re-instatement process can be handled very efficiently over the phone, except right now the IRS's telephone lines are closed due to the shut down. For people in this situation, I would suggest continuing to send in their monthly payments and then call the IRS once they re-open, or alternatively to mail in Form 9465 to request a new installment agreement.

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