The Department of the Treasury and IRS on June 29, 2020 announced in IR-2020-134 that the tax filing and payment deadline of July 15 will not be postponed. Individual taxpayers unable to meet the July 15 due date can request an automatic extension of time to file until Oct. 15.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15.
The IRS Reminds Taxpayers Filing Form 1040 That They Must File Form 4868 By July 15 To Obtain The Automatic Extension To Oct. 15 and The Extension Provides Additional Time To File The Tax Return – It Is Not An Extension To Pay Any Taxes Due.
The IRS urges people who owe taxes, even if they have a filing extension, to carefully review their situation and pay what they can by July 15 to avoid penalties and interest.
Taxpayers can also get an extension by paying all or part of their tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card.
When Getting An Extension By Making A Payment, Taxpayers Do Not Have To File A Separate Extension Form And Will Receive A Confirmation Number For Their Records.
Taxpayers who owe taxes can choose from the following payment options:
- IRS Direct Pay allows payment directly from a checking or savings account. This service is free.
- Electronic Federal Tax Payment System, or EFTPS. Pay by phone or online. This service is free.
- Debit or credit card payment. This service is free, but the processing company may charge a fee. Fees vary by company.
- Check or money order made payable to the United States Treasury (or U.S. Treasury) through the mail.
The IRS recommends that taxpayers who are unable to pay their taxes in full should act as quickly as possible. Tax bills can quickly accumulate more interest and penalties the longer they sit. The usual penalty rate of 0.5% per month is reduced to 0.25% For the calendar quarter beginning July 1, 2020, the interest rate for underpayment is 3%.
Most taxpayers who cannot pay in full have the following payment options:
- Installment Agreement — Taxpayers who do not qualify to use the online payment agreement option, or choose not to use it, can also apply for a payment plan.
- Temporarily Non-Collectible — You can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves. Penalties and interest continue to accrue until the full amount is paid.
- Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an offer in compromise.
- Most people can set up a payment agreement with the IRS. Those who owe $50,000 or less in combined tax, penalties and interest can use the Streamlined Procedure to set up a monthly payment agreement for up to 72 months. Taxpayers can choose this option even if they have not yet received a bill or notice from the IRS.
- Some struggling taxpayers may qualify for an Offer in Compromise This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.