Internal Revenue Service United States Department of the Treasury
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Concluding the Interview

Refund or Balance Due

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 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 Electronic Funds Withdrawal can be set up using the tax software to allow payments to be electronically withdrawn from the taxpayer's checking or savings account on a future date, up to the filing due date.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, Finishing the Return tab.

Tip

Taxpayers don't need to wait for IRS to send a bill before they ask for a payment plan. The Online Payment Agreement (OPA) tool is available at www.irs.gov.

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
  • If the taxpayer is subject to an estimated tax penalty, Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, does not need to be completed. This form is not within scope of the VITA/TCE programs. The IRS will send the taxpayer a bill if they find a penalty. At that time, the taxpayer may seek the assistance of a professional tax preparer to submit this form.
Caution

Advise the taxpayer that the IRS:

  • Charges a fee for setting up installment agreements over 120 days
  • Charges a penalty for the late payment of a balance due
  • Expects the payment of the balance due even when an extension is filed
Collage of woman writing check and Form 1040-V.