Is it really possible that the IRS would charge me enough in fees and interest to make my credit card look like a good option?

Heck yes, they will. Late fees and interest. The IRS is not a bank, they aren't looking for payments. If you don't do what you are supposed to do they will clobber you.

If it were me I would pay off the balance with a low interest credit card.

Are you a homeowner? I wouldn't take out a home equity loan. If you default the bank will take your house.

This is my two cents. Others here are surely more financially savvy. I am usually wary of making payments with a credit card, but in this case it might be the best option.

I've asked a friend with first hand expereince, but haven't heard back yet, but I think the IRS can garnish your wages, as well as collect any tax returns you may get in the future should you not pay the tax bill. That's something to consider - if true, you'd have more control over the credit card debt.

Better to be beholden to a bank or a creditor than to Uncle Sam. So go with the card. If possible, find another low APR credit card (possibly Discover) with a balance transfer option. That might soften the blow as you pay down the debt.

I have first hand experience. And yes, they will charge you exorbitant rates AND garnish your wages (although it took them many years to get to the stage for me). Use the card.

Okay. Thanks, guys, this is good input.

*sigh* Look out, credit cards, here comes more debt.

This question may seem a little naive, but why aren't you paying your taxes as you earn?

netbros, have you never ended up owing taxes at the end of the year?! Heh, or, perhaps I should ask: do you live in the US?

Although I don't make very much money, I still somehow ended up owing the government for 2005. I seldom have extra money laying about, so unexpecteded expenses are difficult to deal with immediately. This year, however, it was my own damn fault: I'm a contractor and should have been paying my taxes quarterly. I don't know what I'll end up owing, but I know it will be more than what I've saved to make the payment.

Speck: I've done it both ways. Yes, it's better to use the card. It leaves you more choices - you can always pay the balance off when you get flush, and you can often switch (balance transfer) to a lower (even 0% rate) card when you get an offer.

Dealing with the IRS is also a world of misery. They don't send statements on time, so you're often in the dark about balance due. They are impossible to get on the phone (long waiting times, and it actually sounds outsourced to another country, believe it or not). Then, too, I just didn't like debt on my tax records and potential court action for defaulting. Creditors, amazingly, are actually easier to deal with.

Netbros, there are a whole lot of reasons why a person might end up owing at the end of the year. Doing a lot of contract work is one. Serious life issues and unpredictable shortfalls are another. Not everyone has taxes withdrawn by the employer.

Good luck, Speck - All I can say is that I felt more personal control when I had debt to a creditor - with whom you can negotiate, incidentally - than when I had debt to the government.

Use the card.

You cannot count on them mailing you your stuff every month-the paperwork you have to mail in with your payment, that is. Much better to pay it off and then not think about IRS at all.