Irs

Forum|Forum|5 years ago
August 23, 2020
1 reply
26 views

Why is the IRS writing me and adding interest when I set up a payment account through you guys?

Best answer by bluedeb

TurboTax has nothing to due with the IRS payment installment plan. If you owe taxes when you file there is an option to select setup a payment installment plan. There is interest added when you enter into the payment installment agreement.

Why do I owe interest and penalties?

Interest and some penalty charges continue to be added to the amount you owe until the balance is paid in full. Learn more about penalties and interest.

Additional Information on Payment Plans

https://www.irs.gov/payments/payment-plans-installment-agreements#:~:text=A%20payment%20plan%20is%20an,liable%20for%20a%20user%20fee.

bluedeb

Answer

Alumni - Champ

Why do I owe interest and penalties?

Interest and some penalty charges continue to be added to the amount you owe until the balance is paid in full. Learn more about penalties and interest.

Additional Information on Payment Plans

https://www.irs.gov/payments/payment-plans-installment-agreements#:~:text=A%20payment%20plan%20is%20an,liable%20for%20a%20user%20fee.

ThermosAuthor

Level 2

After I did my taxes and it said that I owed the irs money I was asked if I would like to be put on a payment plan and then asked for my bank info. Was that not part of filing taxes on turbotax?

Opus 17

Level 15

@Thermos wrote:

After I did my taxes and it said that I owed the irs money I was asked if I would like to be put on a payment plan and then asked for my bank info. Was that not part of filing taxes on turbotax?

It's unclear to me what happened.

In past years, Turbotax would actually apply for a payment plan for you. This had a non-refundable application fee, and you had to wait for the IRS to mail you a letter accepting your application, before payments would start. You could also apply directly on the IRS web site, which had a lower application fee and you got an answer immediately.

I haven't tested the program for 2019, but someone else posted that Turbotax no longer applies for you, it tells you how to apply on the IRS web site. If that's correct, then your instruction page (first page of the PDF for "all forms and worksheets" that you can print or download) would have reminded you to go to the IRS web site to apply. If Turbotax did apply for you, you would have been charged an application fee that was something like $149 or more--if you paid no application fee, then Turbotax did not apply for a payment plan for you.

I just checked the IRS web site and the payment plan site is very different from last year with many fewer options. I suspect they revised their procedures and as part of that they may have eliminated using tax software companies as middlemen, since it resulted in higher fees to taxpayers. But I'm not 100% sure.

Check your instruction page. You may need to apply directly on the IRS web site. https://www.irs.gov/payments/online-payment-agreement-application