Also known as “money orders” or “payment orders,” Money Orders are accepted by the United States Internal Revenue Service (IRS) as an alternative method for paying tax obligations in the United States. They are a form, similar to a check, that can be obtained from various sources by paying the total amount represented plus a fee. According to Credits in USA, Money Orders are available at post offices, banks, check-cashing stores, credit unions, and in retail outlets such as Walmart.
According to the IRS, the way to fill out a Money Order to send it as an alternative tax payment is as follows:
1. Make the U.S. Treasury (United States Department of the Treasury) the payee.
2. Enter the payment amount using digits only.
3. Include: name, address, daytime phone number used, Social Security Number (SSN) or Employer Identification Number, as applicable. This form must also include the tax year for the payment being made.
The money order must be mailed to the postal address indicated on the tax return form or to the address shown in the IRS notice if this concerns a delinquent tax payment. It must be accompanied by the tax return form and any IRS notice (if applicable). The IRS recommends not using staples or fasteners to secure the documents that will be sent under this method.
Money orders authorize the IRS to transfer funds from the taxpayer’s account using the personal information provided on this payment method. In that sense, the taxpayer will notice that the amount will be withdrawn from their account once the request is processed.
Although they are very secure, Money Orders are not always the most advisable option for paying federal taxes. In some cases, taxpayers may be eligible for electronic payment of their obligations, using one of the IRS-approved payment processors or making a direct payment through their bank account. In that way, the waiting time associated with mail-based transactions is bypassed, since electronic transactions are typically processed immediately.
