IRS Unveils Online Payment Agreement Application

by Mike Godfrey, Tax-News.com, Washington

18 October 2006

Many individuals who owe delinquent federal income taxes will now be able to apply online for a payment agreement, the IRS announced on Monday.

The Online Payment Agreement (OPA) application, now available on the IRS website, provides an easy way to voluntarily resolve tax liabilities.

"We think some people may feel more comfortable working out their payments on line rather than talking to a person, so we're making this option available," explained IRS Commissioner Mark W. Everson.

This new Web-based application allows eligible taxpayers or their authorized representatives to self-qualify, apply for, and receive immediate notification of approval.

Taxpayers must have filed all required tax returns in order to use the online application. They should also have the following information available:

• Balance due notice from the IRS.
• Social Security number or Individual Taxpayer Identification Number.
• Personal identification number, which can be established online using the caller identification number from the balance due notice.

Three payment options are available when applying online:

• Pay in full - Taxpayers who pay within 10 days save interest and penalties.
• Short-term extension - Receive a short-term extension of up to 120 days. No fee is charged, but additional penalties and interest will accrue.
• Monthly payment plan - A $43 user fee will be added to the amount owed, and interest and penalty will continue to accrue on the unpaid balance.

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