Do you want to pay a little extra in taxes next year? Well, you can simply by using your credit card! Not only will you pay your annual fee and interestóyouíll also get to pay a "convenience fee"!
As we printed in issue 97:11:02, for the past few years the IRS has been considering accepting credit cards. Recently the IRS announced that, yes, taxpayers can pay their income taxes with a MasterCard, AMEX, Discover, or private issue card. Visa is remaining moot on the issue, so itís still unclear if it will be "everywhere you want to be." (I guess, in this case, where you donít want to be.)
If a taxpayer wishes to "charge it" with a MasterCard or AMEX, she calls a toll-free number. If she plans to use Discover or a Private Issue card from Novus, the cardholder will have to use TurboTax or MacInTax tax software, an additional expense.
The "convenience fee" assessed will be based on the amount of the tax bill. Weíve reported that the government was having difficulty deciding if Americans would be able to charge their taxes because the IRS, who is acting as a merchant in this case, did not want to pay the credit card issuers, as merchants do. Well, the 1997 tax reform law determined that the IRS should pass the fees on to the consumer, in this case, the taxpayer.
The goal, of course, is to collect more taxes. The IRS believes that those who are currently on payment plans or simply do not pay their taxes may choose the credit card option, thus increasing the IRSís collection rate. But, if people arenít paying because they donít have the money and are in serious financial shape, simply adding to credit card debt, plus charging additional fees, doesnít seem like a great idea. Unless, of course, the consumer sees a bankruptcy in their near-term future.
