Introduction:
IRS in the U.S.A is the Internal Revenue Service, a Government agency responsible for collecting taxes under the Government rules of the U.S.A. It is responsible for the enforcement of tax laws for both corporate and individual taxpayers. The current commissioner of the U.S.A Internal Revenue Service is Charles P. Rettig, appointed by the President. Does IRS have payment plans?
The duties of IRS Officer
- IRS was founded in 1862, a federal agency responsible for the collection of taxes from taxpayers. Its duties include enforcement of tax laws and conducting audits.
- They have to ensure that every taxpayer is paying the required amount among what he owned without hiding any asset or income.
- At present the 49th Commissioner of the IRS, Charles P. Rettig has the most powerful investigation tool and authority to audit churches.
- IRS has the right to the formulation of internal tax policy and has tax return processing as one of its main functions.
What is a payment plan?
An agreement has been made with the IRS to pay your taxes within an extended time. This payment plan will be decided according to the previous statements of your payee. The time duration can be from the short-term and long-term payments plans.
Benefits
- Can get extra time firm for tax payments.
- The Short-term Payment Plan is of 180 days additional time. The long-term Payment Plan is 120 days or more.
- IRS debt forgiveness program: Helps avoid high penalties and is useful for credit scores.
Fees
As your tax payment is being extended, it costs some interest to be paid to the IRS. One can pay interest as per the amount being added to your tax bill.
An individual taxpayer can apply for a Short-term Payment Plan by filling out Form 9465 and submitting an installment agreement request through phone or by mail. This is the same for the Long-Term Payment Plan also.
The cost for Short-term Payment Plan and Long-term Payment Plan are as follows:
Short-term Payment Plan | Long-term Payment Plan |
| Repayment period < 180 days. | Repayment period > 120 days. |
| Direct Pay: A feature called direct pay is available for taxpayers where one can pay directly from a savings account. Cost: Free setup, no fees. | Direct Pay: A feature called direct pay is available for taxpayers where one can pay directly from a savings account. Cost: Free setup, no fees. |
| Debit/ credit card: Can make payment through debit/credit card. Cost: As per penalties and interest. | Debit/credit card: payment through debit/credit card. Cost: As per penalties and interest. |
| Online/phone payments: Can pay Electronically through phone or online. Cost: $0 setup fee. | Online/phone payments: Can pay Electronically through phone or online. Cost: $43 setup fee. |
The fee varies for different values of assets. If we opt for more than pay off period of more than 120 days we need to set up an installment plan. Whereas it is not required for less than 120 days.
Direct pay:
It is a safe service for taxpayers. This requires to be applied by filling the Form 1040 series. In this, the tax is directly being deducted from your linked savings account. You can mention your savings account details in the form directly. It does not cost any charges for this service.
One can also keep track of the payment status online by linked email id and get notifications of the same. The payment receipts and reference numbers will be available to ensure that your payment is successful or not. Payments history also can be accessible.
The online checking of direct pay provides a feature the check your payments in the Look Up a Payment option.
Pay your payment plan online:
This feature is for those who are authorized taxpayers. This authority is given by the IRS to an individual applying for this service. It provides us the access to pay our tax online with any debit/credit card charges or any bank deposit charges. It facilitates by a login id and credentials for our account and pays our balance online. It provides a notification holding reference numbers and specifies your payment process- failed or successful.
This ensures cashless payments and instant amount deduction/credit. It benefits for a taxpayer to maintain the transactions at one place any handy when refereeing afterward.
Taxpaying using debit/credit cards:
This feature is provided by IRS with a third party, allowing us to use our debit/credit card details and pay the taxes. It can be done online or via phone. It asks to select the option for debit/credit card and use our credentials like card number, expiry, CVV and make a payment by entering card pin. It immediately provides a notification to the linked mobile number that the payment has been processed.
This is a schema by IRS that helps the taxpayers give a grace period for their tax payments. This ensures an extended time limit of payments and also with no extra penalty taken other than by IRS authorities.
Frequently Asked Questions
- Is IRS dedicated to only U.S citizens?
Ans. IRS is the United States federation that provides the feasibility with a grace period of repayment of takes for the citizens of the U.S.A.
- Can one hide any asset and pay fewer taxes?
Ans. This is not possible for a longer period. The Internal Revenue Service is set up to ensure this kind of activities done by the taxpayers.
- How to pay a tax for IRS Payment Plans?
Ans. It provides various facilities like Direct pay, debit/credit card payments or online transaction payments, etc.