IRS payment site fails on tax day, but you still have to pay
Last-minute filers got a rude surprise on tax day: The IRS website to make payments and access other key services is down. But the agency still expects Americans to pay their taxes on time.
The IRS did not give an immediate explanation for the failures but said in a statement that “certain IRS systems are experiencing technical difficulties.”
The agency also said that taxpayers “should continue filing their tax returns as they normally would.” The problem is, electronic filing is the most popular way to file. And the IRS offered no immediate solution.
Pages on the IRS website (www.irs.gov) used to view account information, make a direct payment or set up a payment plan were all not functioning most of the day Tuesday.
It’s unclear when and why the failure occurred. But it appears, based on a message on the site, that the online payment system became unavailable at 2:50 A.M. ET that morning.
Visitors to the IRS payment site saw one of two messages: One that says the website is unavailable. And another that the outage was due to planned maintenance scheduled to end on Sept. 22, 2016.
Both messages said, “Note that your tax payment is due although IRS Direct Pay may not be available.”
The IRS snafu also caused problems for popular third-party tax preparers such as Turbo Tax and H&R Block. Both said that they will hold onto customer tax returns and file them as soon as the IRS system reopens.
Tax day falls on April 17 this year because April 15 was a Sunday and April 16 was Emancipation Day, a holiday in Washington, D.C.
IRS Acting Commissioner David Kautter testified during a House Oversight Hearing Tuesday that a number of systems are down at the moment and that the agency is working to resolve the issue.
Trump’s top economic adviser Larry Kudlow offered a deadpan reaction when asked about the failure.
“The IRS is crashing? Sounds horrible. Really bad,” he said during a briefing with reporters in West Palm Beach, Florida. “I hope it gets fixed.”
Kudlow said he wasn’t aware of the nature of the issue, but said: “The IRS’ll straighten it out.”
The IRS typically recommends that taxpayers use electronic filing to avoid common mistakes. Online filing is quicker than dropping something in the mail — when the site works, of course
Last year, nearly 122 million refunds were issued, with an average payout of $2,895. For those who are going to miss the deadline – don’t panic – but don’t procrastinate further.
Here is what you need to know if you are not prepared to file and pay your taxes today:
File for an Extension:
The best thing you can do if you know you are going to miss the deadline? File for an extension by submitting Form 4868, which allows you to file as late as Oct. 15.
There are a variety of reasons people might need to file an extension, whether they don’t have all their sources of income and expenses identified or they need assistance, Tim Speiss, partner at EisnerAmper Wealth Planning, told FOX Business. Filing for an extension, however, does not mean you also extend the timeline to pay your taxes.
“To have a valid extension generally – you need to pay in 90% of the tax due at the time of the filing, so in that case by [April 17],” Speiss said. “If you can’t do that, pay in as much as you possibly can to avoid further potential late-filing and interest charges.”
So filing Form 4868 with payment, which can be done online, will keep you in the IRS’ good graces for the time being.
File and Pay as Soon as Possible
Generally people who miss the deadline either ran out of time or didn’t have the money, Ted Kurlowicz, professor of taxation at The American College of Financial Services, told FOX Business.“You should do the least harm and file as soon as possible and pay the tax as soon as possible,” he said.
If you file and pay late, you are most likely going to have to pay extra. A penalty is issued first for filing late. This is 5% of the amount of unpaid taxes each month, up to a maximum of 25%. The penalty for paying late is 0.5% of the amount you owe each month up to a maximum of 25%. If both penalties are due in the same month, the failure-to-file penalty is reduced to 0.5%.
“The late-filing penalty could actually be higher than the late-tax-payment penalty so you should file as soon as possible to do the least harm to your personal finances,” Kurlowicz said.
The IRS will not forget your obligations, so make sure you tend to them promptly.
“If a person is late with filing and late paying taxes, if they’re diligent and proactive with the tax authorities, that’s the best way to position yourself for the best possible outcome,” Speiss said.
If you have suffered a recent hardship, the IRS may also be receptive to your circumstances.
“You could negotiate penalties and interest, not usually the tax, but with a hardship, you might be able to negotiate a tax settlement,” Speiss said.
Being outside the country is a valid excuse for filing and paying late. In that case, the deadline will be extended until June 15, according to Kurlowicz.
Ask for Help
If you are unsure of what to do or how to handle your financial situation, consult or request help from a qualified professional.
“It’s a very stressful experience for many people,” Speiss said. “If you’re in a situation where you don’t think you can meet the filing deadline requirement … it’s always best to go out and hire competent tax advisers to assist you.”
For more tax tips and insights, click here.