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Tax Tip Tuesday: Proposed Revised User Fees Schedule

The IRS is proposing a revised schedule of user fees that would take effect on January 1, 2017 and apply to any taxpayer who enters into an installment agreement.

This proposal affects the law that says federal agencies are required to charge a user fee to recover the cost of providing certain services to the public that grant a special benefit to the recipient.

Current fees can be up to $120, but the revised installment agreement fees would go up to a top rate of $225 for some taxpayers.

The top rate of $225 applies to taxpayers who enter into an installment agreement in person, over the phone, by mail or by filing Form 9465 with the IRS. But taxpayers can cut the fee to $107 if they elect to have their monthly payments done by direct debit from their bank account.

Alternatively, a taxpayer who chooses to set up an installment agreement using the agency’s online payment agreement application will pay a fee of $149. Similarly, they can cut this amount to just $31 by also choosing direct debit.

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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