Payments due with 1040 return

[jskouberdis]

Hello Community Happy 4th of July,

I have a question to all of you.  I have a client who owes $70,000 with his return for 2022.  He can only pay $25,000 now when I efile his return.  If he intends to pay everything off within 6 months can he just pay with the monthly notice that they send him or does he have to work out a payment plan.  It seems that I have done this before and it was okay.  Also with the 1040-V should he cross out the total due and put what he is paying or just leave it the way it was printed and just send in what he can.

John Skouberdis

[George4Tacks · Accepted solution]

That should be an acceptable plan. Why pay for an installment plan, when you can do a delay plan. The client may well be able to make full pay before the IRS even sends a bill.

Depending on the software you use you should be able to enter an amount for the 1040V. No crossing out required. It would be nice that your e-file would reflect reality, not strikeout.

[BobKamman]

Past performance is not a guarantee of future results.  I would advise "just pay when you can, each time you receive a notice" if the balance due was $4,500, or $14,500.  But $45,000?  I would advise the client that IRS is not going to garnish or levy in six months, but might record a federal tax lien.  And that may have adverse consequences to his credit history or public reputation.  

[jskouberdis]

Thanks for replying.  I don't know the exact amount he is going to pay so that is why I am hesitant to change the 1040-V.  It probably does not matter since they are going to give him credit for what he actually pays anyway.  I have found that in the past If you are making monthly payments on your own and you pay everything within a year you really don't need a payment plan.  Have a good holiday.

[jskouberdis]

Thanks for replying.  The man is 79 years old now and I don't think he cares too much about his public reputation or credit rating.  But I have found that when you are consistently paying every month if everything is paid off within 1 year outside of the penalties and interest IRS does not bother you too much.

Happy Holiday