Yet to clear your tax dues? Explore the new direct debit payment option

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Those of you who have not yet paid their taxes are in for a good news. The IRS has made the payment of your tax dues even easier with the introduction of a new payment method.

The IRS already has a full-fledged system for tax collection which includes paper and electronic methods for payment of taxes. The new method is electronics and adds another option to the debt collection program of the IRS.

Read along the following article to know all about this payment method and how you can use it for your convenience.

What is the new payment method?

The newly added payment method to the private debt collection is that of a pre-authorized direct debit. Using this method, you can make one or a series of payments towards your federal income tax dues. The payment option allows you to enable the Private Collection Agency (PCA) to make an authorized payment to the U.S. Department of Treasury against your tax dues on your written consent. The new payment option allows you to automate your payments with the ease of a single phone call to your authorized PCA.

How can you use this payment option?

You can opt for the pre-authorized direct debit payment option by completing and signing a written authorization and submitting it to the PCA by mail or by fax. The authorization is more like a written consent along with your payment schedule and bank account details. 

What happens after you opt for the  pre-authorized direct debit payment option?

On receiving your written authorization letter, the PCA sends back a confirmation letter with details of the pre-authorized direct debits. After this, the PCA prepares checks in the name of the U.S. Department of Treasury as per the payment schedule and sends it to the IRS within 24 hours. 

More about the direct debit option

The pre-authorized direct debit option is a supplement to the existing IRS sponsored payment options. You can always choose to cancel or change these scheduled payments by informing the PCA at least 24 hours in advance.

Once registered for the pre-authorized direct debit payment option, you can still opt to pay your tax dues using the other electronic payment options available on the IRS website or the IRS2Go App. Please note, if you are making such payment yourself through a check, then you would need to raise it in the name of the U.S. Department of Treasury and not the PCA.

Conclusion

In light of the introduction of the new payment option, the IRS has assigned a small number of business accounts to PCAs to collect outstanding tax debts. But as a taxpayer, you need to be on the lookout for scamsters who might act as PCAs and try to take undue benefits by misguiding you. As the MyTaxFiler team always says, stay abreast with the latest tax news and codes and be your own guardian. To know in detail about this new payment option and how you may register for it, you can contact your MyTaxFiler expert today and schedule a payment option to clear your tax dues. 

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