While the majority of Americans get a tax refund from the Internal Revenue Service each year, there are many taxpayers who owe and some who can't pay the tax all at once. The IRS has a number of ways for people to pay their tax bill.
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The IRS has announced an effort to help struggling taxpayers get a fresh start with their tax liabilities. The goal of this effort is to help individuals and small business meet their tax obligations, without adding unnecessary burden. Specifically, the IRS has announced new policies and programs to help taxpayers pay back taxes and avoid tax liens.
Here are 10 tax tips for taxpayers who owe money to the IRS:
Tax bill payments
If you get a bill this summer for late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS.
Additional time to pay
Based on your circumstances, you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at www.irs.gov or by calling 800-829-1040.
Credit card payments
You can pay your bill with a credit card. The interest rate on a credit card may be lower than the combination of interest and penalties imposed by the Internal Revenue Code. To pay by credit card contact one of the following processing companies: Link2Gov at 888-PAY-1040, RBS WorldPay Inc. at 888-9PAY-TAX, or Official Payments Corporation at 888-UPAY-TAX.