Online Payment Agreements and Alerts
Wednesday, April 2, 2014
Posted by: Rhette Baughman
Use the Online Payment Agreement Application for Paying Taxes
Business can now use the online agreement for payroll taxes owed.
The IRS interactive Online Payment Agreement Application is an easy, safe and secure way for individuals and tax professionals to set up a payment plan for overdue taxes.
What is a Payment Agreement or Installment?
You can make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately. However, you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full. Before you apply:
- File all required tax returns;
- Consider other sources (loan or credit card) to pay your tax debt in full to save money;
- Determine the largest monthly payment you can make; and
- Know that your future refunds will be applied to your tax debt until it is paid in full.
The IRS online system is an application that allows you or your authorized representative (Power of Attorney) to apply for an installment agreement if you cannot pay your taxes in full. You can request either a short-term extension of up to 120 days to pay or a monthly payment plan.
Who can apply for an online payment plan?
- Individuals filing Form 1040 and with combines total tax penalty and interest of $50,000 or less.
- Businesses owing payroll taxes of $25,000 or less in combined total tax, penalties and interest.
- Tax Professionals can also use the online system to request payment plans for their clients.
- You must have filed all required tax returns.
- You must be able to pay the amount in full within 72 months or 6 years or less.
How to Apply for an Online Agreement
Go to irs.gov home page – click on “Tools” and then click “Online Payment Agreement”. This will take you to the application page.
Fees for setting up an installment agreement:
- $52 for a direct debit agreement.
- $120 for a standard agreement or payroll deduction agreement.
- $43 if your income is below a certain level. (use form 13844 to request a reduced fee if you qualify)
You can find more information by clicking the “Help” button within the application.
Alert: New TAS Phishing Scam
The IRS has been alerted to a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number and the following message:
“Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”
The recipient is directed to click on links that supposedly provide information about the "advocate" assigned to their case or that let them "review reported income."
The links lead to web pages that solicit personal information.
Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at firstname.lastname@example.org. For more information, visit the IRS's Report Phishing [http://www.irs.gov/uac/Report-Phishing] web page.
The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.
You may also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at 1-800-366-4484.
Source: Content and images provided by IRS Small Business / Self-Employed Communications & Stakeholder Outreach
Small business owners, especially new sole proprietors, can find a wealth of information covering their federal tax responsibilities on www.IRS.gov. The SB/SE Tax Center (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Small-Business-and-Self-Employed-Tax-Center-1) is the “Go To” IRS.gov page for everything small business.