1120 with small balance due

[John of PA]

How are you handeling a client who owes only 100 dollars for their C Corp 1120 tax return. As you may know, IRS does not allow the taxpayer to mail them a check, but it must be paid electronically.

[JohnH]

What happens if the client sends a check with the return? Surely IRS won't send the check back and then at the same time send a bill (which can be paid by check), will they? IRS web site also says there's a way to pay through the financial institution but they don't mention what the cost might be.

I know if they send in the 1120 without payment they will receive a bill for the balance - which can be paid by check. But I don't know what penalties might be assessed, if any. It would be wise to file the return well in advance of the due date.

[John of PA]

IRS will impose a penalty in this situation, I'm not sure how much but they will.

[JohnH]

Here's a link to the same-day payment system through a bank.
Form 1120 is one of the forms listed on the worksheet.

https://www.irs.gov/payments/same-day-wire-federal-tax-payments

But depending upon what the bank charges for the transaction, it might be simpler to just pay whatever penalty is imposed. Depends upon the amount of the penalty.

[Rapid Robert]

Why wouldn't you just schedule EFW (electronic funds withdrawal) with the efiled return?

"However, if the corporation does not want to use EFTPS, it can arrange for its tax professional, financial institution, payroll service, or other trusted third party to make deposits on its behalf."

[John of PA]

Thank you John and Rapid for your helpful comments. I did not realize I could do this with Drake but I see the PMT screen can do this. Great.
Tullio

[Burke]

VA had a notice with Form 770 Fiduciary Return instructions (which allowed e-filing for the first time this year) regarding the same thing. Paper check option was not in software. So we filed extension with payment and extension form, then e-filed return showing extension payment on it. Voila!