How to Pay IRS Back Taxes

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By CM Herold
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IRS Back Taxes

If you owe IRS back taxes, it's important not to ignore the situation. If you do not face the problems with IRS back taxes, you may have your bank accounts frozen and money drained from your accounts. Your property may be seized, your wages and even your Social Security benefits may be attached. Even though having IRS debt can be stressful, there are ways to get IRS tax help and avoid an IRS levy. To pay IRS back taxes, follow the steps below.

Difficulty: Moderately Easy

Instructions

Step 1

If you owe less than $25,000 in IRS back taxes, make arrangements to pay IRS back taxes by making installment payments. Fill out an application online. To start the installment process online, go to the IRS website at irs.gov. You will need your Social Security number, income and expense information, and IRS PIN number. If you do not have an IRS PIN number, call the IRS at the toll-free number on the IRS website.
Step 2

To fill out a paper application for installment payments for IRS back taxes, go to irs.gov/pub/irs-pdf/f9465.pdf. Print the form, fill it in, and mail it to the address specified on the form. To be eligible for an installment agreement you must have filed all previous years' tax returns.
Step 3

After your installment plan has been approved, pay IRS back taxes by signing up for automatic withdrawals. Have money deducted each month from your bank account or payroll checks. The IRS also accepts checks, money orders, and credit card payments. After you are approved for installment payments, you will still be charged interest and penalties, so it's important to pay off IRS back taxes as quickly as possible.
Step 4

Pay IRS back taxes online or on the telephone by using EFTPS at eftps.gov/eftps/. EFTPS is a government site for paying IRS debt. It is necessary to enroll in EFTPS before making any payments and wait approximately two weeks for a PIN. If you are going to be making installment payments, enroll in EFTPS as soon as possible.

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taxattorney said

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on 4/19/2009 BEWARE: The IRS will allow you to enter into an installment agreement with the amount you pay monthly not even covering the accruing interest. Make sure you know what the interest rate is that IRS is currently charging. Do the math. Make sure you payment amount is covering the monthly added interest, plus paying down the principal. Otherwise, you're just wasting your money and may need a tax professional to try to work out an offer in compromise.