Paying a Balance Due

A balance due is money a taxpayer owes to the IRS. Experienced tax preparers may refer to a return as being a "bal due" return. This means that instead of receiving a refund, the taxpayer needs to pay the IRS.

Taxpayers who file paper returns can pay their balance due by mailing Form 1040-V, Payment Voucher, to the appropriate address with their payment.

Form 1040-V, is generated by the tax software when the return results in a balance due. Electronic Funds Withdrawal can be set up using the tax software to allow payments to be electronically withdrawn from the taxpayer's checking or savings account on a future date, up to the filing due date. Review the Publication 4012 (Tab 6).

Advise taxpayers that their payment must be made by the April filing due date to avoid penalties and interest.

• If the taxpayer is unable to pay in full, see the Publication 4012 for the various payment options available
• Taxpayers who can pay a portion of the balance due by the due date will not be charged interest and penalties on that portion

Advise the taxpayer that the IRS:

• Charges a fee for setting up installment agreements
• Charges a penalty for the late payment of a balance due
• Expects the payment of the balance due even when an extension is filed