As the IRS continues shifting toward electronic only payments, taxpayers are gaining convenience — but also facing new pitfalls. Whether you’re making an estimated payment, an extension payment or paying a balance due with a notice, correctly selecting the payment type and tax year is essential to keeping your IRS account accurate and avoiding unnecessary notices, interest and penalties.
Electronic IRS Payment Pitfalls – Online Setup Requires Careful Precision
When paying online through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS), you must choose both the type of payment (such as “2025 Estimated Tax”) and the tax year to which the payment applies. This may sound straightforward, but mistakes are surprisingly common, especially when taxpayers make a payment in the current year intended for the prior year. For example, a payment made in early 2026 intended for the 2025 tax year will not be automatically applied to 2025 unless the correct year is selected.
Once a payment is made, it can be difficult to get the IRS to reapply electronic payments to different tax periods, even if you made a clear mistake in selecting the payment type or year. Misapplied electronic payments can lead to incorrect balances, delayed refunds or penalty notices — issues that can take months to resolve.
It is also critical that the payments be made under the primary taxpayer’s SSN. A married client recently received a shocking IRS notice stating they owed $1.8 million, even though they had never missed an estimated tax payment. The payments had been made under the spouse’s SSN, and the IRS had not properly credited them to their estimated tax account.
Recommendation: Before submitting, carefully confirm the Tax Year, the Reason for Payment and that the payment is entered under the primary taxpayer’s SSN.
Snail Mail Changes for IRS Payments
Currently, the IRS is still accepting payments via check. For those who prefer mailing checks, timing also matters. As of December 2025, the U.S. Postal Service applies postmarks at the first regional facility, not necessarily the day you drop the envelope at your local post office or blue mailbox. This means a payment or tax filing dropped off on the due date may not receive a same day postmark and could be treated as late.
Recommendation: Allow several extra days for mailed items to be processed and postmarked, and avoid last-minute payments on the due date.
Key Takeaways to Avoid IRS Payment Errors
With tax filings becoming increasingly digital, taking a moment to double check your payment and tax year selection, as well as mailing timelines, can prevent unnecessary headaches. When in doubt, reach out — accurate tax payments start with attention to detail.
Author: Katie Daniels, CPA | [email protected]
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For more information on this topic, please contact a member of Withum’s Business Tax Services Team.
