IRS Increases Fees for Installment Agreements Effective January 1 2017

IRS has announced an increase in the user (processing) fees for Installment Plans and Offers in Compromise effective January 1, 2017.  Under OMB rules, IRS is supposed to charge user fees and is supposed to recover full cost.  The costs of providing the service is examined every two years and the fees revised as needed. The fees for installment agreements were last revised effective January 1, 2013.  The new fees for installment agreements are:

Regular installment agreement (submitted in person, over the phone, or by mail) - $225.

Regular agreements with direct debit - $107.

Online payment agreement - $149.

Direct debit online payment agreement - $31.

Restructured or reinstated agreement - $89.

Low-income rate - $43.  (All income levels qualify for the $31 rate mentioned above.)

The IRS News Release says IRS has typically charged less than the actual costs but was doing so in an effort to make the particular activity (installment agreements in this case) more accessible to more taxpayers.  Due to budget constraints IRS can no longer continue this practice of charging less than actual costs.

News Release 2016-108, August 19, 2016


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