User Fee for Installment Agreement Increases

User Fee for Installment Agreement Increases

Currently a taxpayer who wishes to pay federal tax liabilities can set up an installment agreement with IRS. The IRS user fee is $43 to enter into the agreement and $24 to restructure an agreement or reinstate an agreement after a default.

IRS has recently calculated the current costs related to processing an installment agreement and determined the full cost is $105 to enter into an agreement and $45 to restructure or reinstate an agreement. Therefore under the OMB Circular, IRS has to charge this full cost. However the OMB Circular permits a reduced amount for direct debit installment agreements. IRS has determined the default rate of direct debit agreements is much lower than other agreements and has set a reduced fee of $52 for entering into such an agreement. The $45 applicable to restructuring or reinstating an agreement is the same whether the taxpayer uses a direct debit or not.

Summary:

- Installment agreement w/o direct debit = $105

- Installment agreement w/direct debit = $52

- Restructure or reinstate installment agreement = $45

Currently these new fees are scheduled to be effective for any installment agreement entered into, restructured, or reinstated on or after January 1, 2007.

We would be happy to send you a copy of the regulation addressing these new rates upon request.

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This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) , , , and .

©2006 Ashwaubenon Tax Professionals. No reproduction of this article is permitted without the express consent of Ashwaubenon Tax Professionals, 2140 Holmgren Way, Suite 1040, Green Bay, WI54304.

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