Owe the IRS? You might be able to get 120 extra days to pay your tax bill

April 17, 2011

Most of America's 141 million tax return filers have submitted their 1040s to the IRS.

The late filers, including yours truly, tend to be people who owe Uncle Sam. Many of us on April 18 will be sending the IRS an extension to file Form 4868.

Remember, though, that an extension to file is just that; it only gives you more time to send in your tax forms. If you have a tax bill due, the IRS expects you to pay it or as much of it as you can by tomorrow.

The Daily Tax Tip for Friday (#15 in the April list) examined ways to pay what you owe.

There is, however, one tiny bit of payment relief.

If you can't pay your total tax bill by tomorrow but expect to have the cash on hand soon, the IRS might give you up to 120 days, to pay your tax bill in full.

Begin with a call to the IRS at 1-800-829-1040 to discuss your tax payment cash flow situation. You also can apply for a short-term extension to pay by submitting an Online Payment Agreement (OPA) application.

There is no extra fee for an extension to pay. You will, however, still owe interest on your tax debt.

Remember that this extra time to pay means you agree to pay your tax bill in full in one payment by the end of the allowed extension period. It's not simply a way for you to postpone setting up an installment tax payment plan.

If you fail to fulfill your pledge to pay up in full within the allotted extension to pay period, you can bet the IRS will come after you in full force.

And an extension to pay also is not an option if you've already received a notice from the IRS about your due tax bill.

A short-term extension to pay is mentioned in this IRS video on payment options.

And as noted in the video, be sure to file your 1040 by the filing deadline, regardless of your ability to pay what you owe.

The penalties for not filing your paperwork are actually more severe than those for not paying.

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