Brendan Byrne of Chicago’s Humboldt Park neighborhood spent nearly two years battling bureaucratic hurdles to resolve a tax payment that vanished into a digital void, a case highlighting the risks of using third-party payment processors linked to the IRS website. Byrne’s ordeal began after he paid $979, plus a $17.82 convenience fee, toward his 2023 federal tax bill through PayUSAtax in 2024.
Despite the charge appearing on his credit card statement, the IRS initially showed the payment as “pending.” Later, the pending status disappeared, yet Byrne’s account still indicated he owed the full amount, plus accruing interest. He was directed by the IRS to contact PayUSAtax, only to be sent back to the IRS, creating a frustrating cycle of unanswered questions.
PayUSAtax, operated by Value Payment Systems, was listed as an authorized payment provider on the IRS website at the time. Although, hundreds of taxpayers have since reported similar issues with the platform, according to online complaints. The Better Business Bureau has logged 294 complaints against Value Payment Systems’ parent company, Catalis, over the past three years, though the number of complaints has decreased to 21 in the last 12 months.
Eric Johnson, executive vice president at Catalis, attributed the problems to user errors – mistyped numbers or discrepancies in names and Social Security numbers – but acknowledged that occasional payments “fall through the cracks.” He stated that PayUSAtax processed approximately 6 million transactions, totaling around $10 billion in 2024, and estimated that less than 0.1% of those transactions experienced issues.
Byrne’s situation worsened when he filed his 2024 tax return. The IRS seized nearly half of his $2,561 refund, claiming no record of the previous $979 payment and asserting he still owed $1,057.32. He attempted to dispute the charge with his credit card issuer, but was unsuccessful. “I felt helpless, actually,” Byrne said. “No one was giving me any answers.”
After inquiries from the Chicago Sun-Times last summer, Catalis said it would contact the IRS to resolve Byrne’s case. Catalis determined Byrne had not made any errors. The IRS eventually located the payment, deeming it “unpostable” in October. An IRS spokesperson explained in January that “some transactions, payments and returns cannot post to the master file due to programming checks for specific conditions,” which can create “unpostables” requiring review.
The IRS located Byrne’s payment around the time of a brief government shutdown in October and November 2023, which impacted some IRS activities. In mid-December, Byrne received a refund check for $1,105.42, including accrued interest.
PayUSAtax is no longer in operation. Catalis exited the federal tax payments business in 2025 and now focuses on providing software and processing payments for local governments. The IRS continues to utilize third-party payment processors – Pay1040 and ACI Payments – for taxpayers using debit or credit cards, with processing fees ranging from 1.75% to 1.85% depending on the payment type. Taxpayers can also pay via direct pay from their bank account, mail a check or money order, or use a same-day wire transfer. The IRS also offers payment plans, with potential user fees that may be reduced or waived based on income.
A Reddit user posted in February 2026 about a similar experience with PayUSAtax, reporting a pending transaction for a 2023 tax payment that remained unresolved for over 45 days, despite contacting the IRS.
