IRS Hasn't Debited My Account for Payment Plan | What To Do

February 02, 2023 by Steve Banner, EA, MBA
Puzzle with missing piece - money shown where piece is missing

I assume we are talking here about a direct debit installment agreement (DDIA) that you have set up with the IRS, in which regular monthly payments are deducted from your bank account and paid toward your tax debt. You very likely learned a lot of things about the tax system by the time you reached the point of applying for a DDIA agreement and had it accepted by the IRS.

This would have included finding out that you must continue to pay interest and penalties on your debt up until the time that you make your final installment payment. You would have also learned that failing to pay your installments on time may cause your payment plan to go into default. And if your plan does go into default, the IRS may take enforced collection actions to get the money that you owe them. These collection actions can include issuing a levy on your salary or other income, on your bank accounts, or on other property that you own.

I don’t mean to sound like Darrell Downer, all filled with doom and gloom when I bring up the subject of levies, but, at the same time, I don’t blame you for being a bit concerned when a payment that you promised to make looks like it’s gone AWOL. After all, what we are trying to achieve here is to take an agreed sum of money from your bank account every month and make sure that the same sum of money gets credited against your tax account every month at the IRS. But when something goes wrong with this simple chain of events, we need to investigate.

The first step is to contact your bank to see if the payment has been taken from your account. It could well be that your bank has encountered payment processing problems that have affected you and other customers, thus delaying the payment of your funds to the IRS for a few days. On the other hand, if your payment has left your bank account as scheduled, then this means that the delay in crediting the funds against your tax debt is at the IRS end of the transaction chain.

But please be aware that the IRS fully expects that there will always be some delay between the time it receives an electronic payment on behalf of a taxpayer and the time that those funds are credited to that taxpayer’s account. You can check the balance and payment history of your tax debt by setting up an individual online account on the IRS website. The IRS also advises taxpayers to allow a week or so for a recent payment via their website to be credited to their account.

In the case that you find that your payment has left your bank account but two weeks later has still not been credited to your tax account, then further action is needed. The cause could simply be that the increased tax season workload at the IRS has caused unusually long delays to the processing of DDIA payments, or there could be other factors involved, such as a computer error that accidentally erased your installment agreement. No matter what caused the problem, you need to get to the bottom of it sooner rather than later.

In this situation, you can contact the IRS, or alternatively you can contact one of our experienced tax professionals to discuss your case. This no-cost, no-obligation service will allow you to learn what options are available to make sure your installment agreement gets promptly back on track. This way, you will be able to continue to pay down your tax debt as planned, and Darrell Downer will stay locked in the closet where he belongs!

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Steve Banner, EA, MBA
Tax Content Developer

 

Steve Banner began his career in the field of income tax in 1977 and has since gathered business experience in a variety of countries and cultures. In addition to the United States, he has lived and worked for extended periods in Australia, Saudi Arabia, Canada, and Sweden. Along the way he studied Adult Education and earned a Bachelor of Education, Master of Educational Administration, and MBA. He joined TaxAudit in 2016, where he is a Tax Content Developer.


 

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