Botched online tax payment left Humboldt Park man waiting nearly 2 years for a fix

When Brendan Byrne paid his federal taxes online in 2024, he never dreamed the payment would get so tangled up that it would take more than a year to straighten out.

After filing his 2023 federal tax return, Byrne owed $979. The Humboldt Park resident paid the balance through the now-defunct platform PayUSAtax, which was linked on the IRS website and listed as an authorized payment provider.

Hundreds of people have complained online about PayUSAtax, which was operated by Value Payment Systems.

The Better Business Bureau has logged 294 complaints about Value Payment Systems' parent company, Catalis, over the last three years, though it reports a drop-off to 21 complaints in the last 12 months.

Eric Johnson, executive vice president at Georgia-based Catalis, said the complaints represent a small fraction of its transactions, and most of the issues with PayUSAtax stemmed from mistyped numbers or names, or Social Security numbers and names that don't correspond, in the case of tax returns filed jointly.

"Occasionally, there's one that falls through the cracks," Johnson said.

When Byrne logged into the IRS website, he saw his payment status was pending. Since the money had already been charged to his credit card — along with a convenience fee of $17.82 — he figured the IRS was slow in crediting the funds.

Later, the pending status disappeared, but his account showed he still owed the IRS $979, plus interest.

Byrne said the IRS told him to contact PayUSAtax, who said they couldn't help and referred him back to the IRS.

By early 2025, Byrne was still trying to get his PayUSAtax payment processed by the IRS. Meanwhile, he filed his 2024 federal tax return, only for the IRS to seize almost half of his $2,561 refund.

"They claimed that they could not see a pending payment of $979, and there was no evidence I ever made a payment of that amount and that I owed the $1,057.32 that they removed from my refund," Byrne said.

He tried, unsuccessfully, to also dispute the PayUSAtax charge with his credit card issuer.

"I felt helpless, actually," Byrne said. "No one was giving me any answers."

The Chicago Sun-Times asked Catalis about Byrne's problem last summer, and the company said it would contact the IRS and try to resolve the issue.

Catalis determined Byrne didn't make any errors, and by October, it heard from the IRS that the payment "was located [and] was unpostable."

An IRS spokesperson said in a statement in January that "some transactions, payments and returns cannot post to the master file due to programming checks for specific conditions. These conditions generate 'unpostables' that may require review and resolution determination."

The IRS found the payment around the time of the government shutdown, which lasted from Oct. 1 through Nov. 12, affecting some IRS activities. Finally, in mid-December, the IRS sent Byrne a refund check — for $1,105.42, which included interest.

PayUSAtax would send funds to the IRS "almost instantaneously," but if there was a problem, the IRS would be responsible for straightening out the issue, Johnson said.

He said complaints about poor customer service were due in part to a lag in federal background checks for about two dozen extra call center workers Catalis was trying to hire in 2023. The company also created a new system in December 2023 to help taxpayers more easily check on the status of their payments, he said.

In 2024, PayUSAtax processed about 6 million transactions, totaling about $10 billion. Johnson said the company estimated "less than 0.1%" of transactions had problems.

PayUSAtax shuttered in 2025.

Johnson said Catalis got out of the federal tax payments business and is no longer an IRS vendor. Catalis focuses on providing software and processing payments for local governments collecting taxes, parking violation fees, child support payments and other bills.

The IRS still uses third-party payment processors for taxpayers who are using their debit or credit card. The companies, Pay1040 and ACI Payments, each charge a card processing fee at rates dependent on the payment type. For example, credit card transaction fees can range from 1.75% to 1.85%.

Other ways to pay your federal income tax includes mailing a check or money order, same-day wire or direct pay, which draws the money from the taxpayer's bank account for free.

The IRS also allows certain filers to apply for a payment plan, though some may charge a user fee, which can be reduced, waived or reimbursed depending on a taxpayer's income.