When do we charge interest?
When do we pay interest?
The IRS generally charges interest on any unpaid balance.
Interest start date
Interest will start on April 15, if your return shows you owe tax. An extension of time to file is NOT an extension of time to pay. If April 15 is on a weekend or holiday, your return will be considered timely filed and paid, as long as you file and pay by the next business day.
Payment on notices
If you received a notice, interest will stop being charged on the amount shown on your notice, if you fully pay the amount you owe before the “pay by” date.
Payments are applied first to tax, then to penalties, and finally to interest.
If you can’t pay your entire balance, pay what you can now. You can enter into an Installment Agreement to pay the remaining balance.
With an installment agreement the failure to pay penalty rate may be reduced.
Interest will continue to accrue daily on any amount not paid, including on both penalties and interest.
If any of your tax and/or penalties are reduced, we will automatically reduce the related interest.
The IRS doesn’t remove or reduce interest for reasonable cause or as first-time relief. Interest is charged by law and will continue until your tax account is fully paid.
The IRS may only reduce the amount of interest you owe if the interest is due to an unreasonable error or delay by an IRS officer or employee in performing a ministerial or managerial act.
If you have a notice, call the number listed on the top right hand side of the notice. Otherwise, you may call, 1-800-829-1040. See telephone assistance for additional information. Please have your paperwork (such as cancelled checks, amended return, etc.) ready, when you call.