IRS Increases Fees for Installment Agreement and OIC

IRS has announced an increase in the user (processing) fees for Installment Plans and Offers in Compromise
effective January 1, 2014.  Under OMB rules, IRS is supposed to charge user fees and is supposed to recover full cost.

Currently the fee for an Installment Agreement is $105, a reduction to $52 for a direct debt agreement, and $45 to restructure or reinstate a defaulted agreement.  IRS has determined that the cost of an installment agreement is $282, $122 if it is a direct debit agreement, and $85 to restructure/reinstate a defaulted agreement, therefore an increase in the user fee appears to be appropriate.  The new fees beginning January 1, 2014, are:  $120 for an installment agreement and $50 to restructure/reinstate a defaulted agreement.  The direct debit agreement fee does not change.

The current fee for an Offer in Compromise is $150.  IRS has determined that the full cost of processing an Offer in Compromise is $2,718.  The new fee beginning January 1, 2014, for an Offer in Compromise is $186.  The “no fee” for low-income taxpayers continues to apply.