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IRS Summertime Tax Tip 2014-18: Six Tips for People Who Owe Taxes

While most people get a refund from the IRS when they file their taxes, some do not. If you owe federal taxes, the IRS has several ways for you to pay. Here are six tips for people who owe taxes:

  1. Pay your tax bill.  If you get a bill from the IRS, you’ll save money by paying it as soon as you can. If you can’t pay it in full, you should pay as much as you can. That will reduce the interest and penalties charged for late payment. You should think about using a credit card or getting a loan to pay the amount you owe.
  2. Use IRS Direct Pay.  The best way to pay your taxes is with the IRS Direct Pay tool. It’s the safe, easy and free way to pay from your checking or savings account. The tool walks you through five simple steps to pay your tax in one online session. Just click on the ‘Pay Your Tax Bill’ icon on the IRS home page.
  3. Get a short-term extension to pay.  You may qualify for extra time to pay your taxes if you can pay in full in 120 days or less. You can apply online at IRS.gov. If you received a bill from the IRS you can also call the phone number listed on it. If you don’t have a bill, call 800-829-1040 for help. There is usually no set-up fee for a short-term extension.
  4. Apply for a monthly payment plan.  If you owe $50,000 or less and need more time to pay, you can apply for an Online Payment Agreement on IRS.gov. A direct debit payment plan is your best option. This plan is the lower-cost, hassle-free way to pay. The set-up fee is less than other plans. There are no reminders, no missed payments and no checks to write and mail. You can also use Form 9465, Installment Agreement Request, to apply. For more about payment plan options visit IRS.gov.
  5. Consider an Offer in Compromise.  An Offer in Compromise lets you settle your tax debt for less than the full amount that you owe. An OIC may be an option if you can’t pay your tax in full. It may also apply if full payment will cause a financial hardship. You can use the OIC Pre-Qualifier tool to see if you qualify. It will also tell you what a reasonable offer might be.
  6. Change your withholding or estimated tax.  You may be able to avoid owing the IRS in the future by having more taxes withheld from your pay. Do this by filing a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator on IRS.gov can help you fill out a new W-4. If you have income that’s not subject to withholding you may need to make estimated tax payments. See Form 1040-ES, Estimated Tax for Individuals for more on this topic.

To find out more see Publication 594, The IRS Collection Process. You can get this booklet on IRS.gov. You may also call 800-TAX-FORM to get it by mail.

Additional IRS Resources:

IR-2014-80: IRS “Taxpayer Bill of Rights” Now Available in 6 Languages; 10 Key Rights Outlined in Updated Publication 1

WASHINGTON ― The Internal Revenue Service announced today that its cornerstone “Taxpayer Bill of Rights“ document is now available in six languages.

Newly-revised versions of Publication 1, Your Rights as a Taxpayer, are now posted on IRS.gov in English, Spanish, Chinese, Korean, Russian and Vietnamese. By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law.

The Taxpayer Bill of Rights takes the multiple existing rights embedded in the tax code and groups them into 10 broad categories, making them easier to find and understand.

“We believe that these rights are critically important for people to know and understand, and translating them into additional languages helps us reach even more taxpayers,” IRS Commissioner John Koskinen said. “We encourage people to take a moment to read the Bill of Rights.”

The Taxpayer Bill of Rights contains 10 provisions. They are:

    1. The Right to Be Informed
    2. The Right to Quality Service
    3. The Right to Pay No More than the Correct Amount of Tax
    4. The Right to Challenge the IRS’s Position and Be Heard
    5. The Right to Appeal an IRS Decision in an Independent Forum
    6. The Right to Finality
    7. The Right to Privacy
    8. The Right to Confidentiality
    9. The Right to Retain Representation
    10. The Right to a Fair and Just Tax System

The IRS has created a special section of IRS.gov to highlight the 10 rights. The website will continue to be updated with information as it becomes available.