What interest rate does the IRS charge?

Question

Going to owe an additional 4k in taxes this year and am considering my payment options. What is the interest rate the IRS charges if you set up payments with them?

Answer 1

First there is a fee of $105 just to set up the payment agreement--unless you let the IRS deduct monthly payments from your bank account, then the set up fee is only $52.

Looks like the current interest rate is 5%. Also a failure to pay penalty of up to 1%. Here is a link to the payment plan option and it has links that will answer some of your questions too--

http://www.irs.gov/businesses/small/article/0,,id=108347,00.html

http://www.irs.gov/businesses/small/article/0,,id=124483,00.html

Answer 2

The rate approximately is "hella high." Just call them, and let them know you cannot pay in full, but you would like to make arrangements. I owed them $1,200.00 and I didn't pay anything at all for an entire year. They just took my refund for the next year, and my stimulus refund. They did threaten to garnish my check, but we didn't quite get to that point. So you have about a year of play time until things get serious. I ended up paying them about $1700.00 total, so I paid about $500.00 in interest and fees.

Answer 3

The interest rate is adjusted quarterly. It's currently 8%.

Answer 4

8%