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Balance Due Returns

Taxpayers who owe additional tax must pay their balances due by the original due date of the return or be subject to interest and penalties. An extension of time to file may be filed electronically by the original return due date, but it is an extension of time to file the return, not an extension of time to pay a balance due. Providers should inform taxpayers of their obligations and options for paying balances due. Taxpayers have several choices when paying any taxes owed on their returns as well as estimated tax payments.

Electronic Funds Withdrawal

Taxpayers can e-file and, at the same time, authorize an electronic funds withdrawal (EFW). Taxpayers who choose this option must provide account numbers and routing transit numbers for qualified savings, checking or share draft accounts to the Provider. The IRS tax return instructions describe how to find and identify these numbers. Providers should encourage their clients to confirm their account numbers and routing transit numbers with their financial institution. If a financial institution is unable to locate or match the numbers entered in a payment record with account information they have on file for a given taxpayer, they reject (return) the direct debit request.

Providers should caution taxpayers to ensure, before they e-file, that their financial institution allows EFW requests from the designated account. Some credit unions do not permit direct debits from share accounts.

Taxpayers can schedule a payment for withdrawal on a future date. Scheduled payments must be effective on or before the return due date. For example, the Provider may transmit an individual income tax return in March and the taxpayer can specify that the withdrawal be made on any day on or before the return due date. The taxpayer does not have to remember to do anything at a later date. For returns transmitted after the due date, the payment date must be the same as the date the Provider transmitted the return. The taxpayer must authorize EFW payments by completion of a payment record at the time the balance due return or form is e-filed.

Taxpayers can make payments by EFW for the following:

Providers should be careful to ensure that all the information needed for the EFW request is included with the return. The payment record must include the following:

  • Routing Transit Number (RTN);
  • Bank account number;
  • Type of account (checking or savings);
  • Requested payment date (e.g., YYYMMDD); and
  • Amount of tax payment for balance due payments sent after the due date; this amount may include interest and penalty payment.

If taxpayers do not provide all of the needed information, Providers must contact the taxpayers. If the Provider is unsuccessful in obtaining or transmitting the EFW information, but the return is otherwise complete, the Provider should proceed with the origination of the electronic return data to the IRS. The Provider must inform their clients that they need to make other arrangements to pay the balance due and/or estimated payments. See below for other payment options.

Credit or Debit Card Payments

Taxpayers may also pay electronically using a credit or debit card. Taxpayers can make credit or debit card payments when e-filing or separately via telephone or the Internet.

  • Integrated e-file and e-pay: Taxpayers can e-file and, at the same time, pay the balance due by credit or debit card if the tax software used includes this option. The software prompts taxpayers to enter the necessary card information. The service provider charges taxpayers convenience fees based on the amount of the tax payment and informs them of these fees before taxpayers authorize the payments.
  • Pay by Phone or Internet: Taxpayers may pay a balance due by phone or the Internet using a major credit card (American Express® Card, Discover® Card, MasterCard® or Visa® card). This service is available through credit card service providers. The service provider charges a convenience fee based on the amount of the tax payment. The software advises taxpayers of this fee during the transaction, and they can choose to end the transaction before the payment is completed and confirmed. The software provides a confirmation number at the end of the transaction. EROs should inform taxpayers of this option and advise them that fees may vary between service providers.
  • An ATM/debit card payment option is available through the service providers. Pay by phone or internet using a Visa® consumer debit card or a MasterCard® consumer debit card. You can also pay with an ATM/debit card with the NYCE®, PULSE® or STAR® logos. The service provider charges a convenience fee per payment transaction.
  • Taxpayers can make payments by phone or the Internet via credit or debit card for the following:

Electronic Federal Tax Payment System (EFTPS)  

Individual taxpayers, who make more than one tax payment per year, particularly installment or Form 1040 estimated payments, find EFTPS very convenient. Taxpayers can enroll in EFTPS via the Internet at EFTPS.gov or by completing Form 9783 (EFTPS Individual Enrollment Form) and mailing it to the EFTPS Enrollment Center. After EFTPS processes the enrollment, taxpayers receive two separate mailings. One is a Confirmation/Update Form. The other is a letter that includes the taxpayers’ Enrollment Trace Number, Personal Identification Number (PIN) and instructions on how to obtain an Internet Password. Once taxpayers receive the PINs, they may begin making payments by phone. After the taxpayers obtain their Internet Password, they may begin making payments via the Internet. With EFTPS, taxpayers only need to enroll once to make a payment by both telephone and the Internet as the payment methods are interchangeable. Payments can be made 24/7; however, taxpayers must submit their tax payment instructions to EFTPS before 8:00 p.m. ET at least one calendar day prior to the tax due date. Taxpayers can schedule individual tax payments up to 365 days in advance.

Pay By Check

Taxpayers may pay the balance due by mailing a check accompanied by Form 1040-V, Payment Voucher. Providers must supply Form 1040-V to taxpayers, if needed, and help them identify the correct mailing address from the chart on the back of the form. Taxpayers do not have to mail these vouchers at the same time the Provider transmits the electronic return. For example, the return may be transmitted in January and the taxpayer may mail the payment and voucher at any time on or before the return due date.

Installment Agreement Requests

Taxpayers who cannot pay the amount they owe for Form 1040 series returns and owe $25,000 or less in combined taxes, interest and penalties may use the Online Payment Agreement (OPA) application to request an installment agreement. They can also submit Form 9465, Installment Agreement Request, to the IRS. The Provider can transmit Form 9465 electronically (if supported by software) with the taxpayer’s electronic return data, or it may submit it later, either electronically or on paper. If accepted, the IRS charges a user fee for setting up the installments.

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Page Last Reviewed or Updated: 22-Apr-2014