User Fees for Installment Agreements and Offers in Compromise to Go Up

By Sally P. Schreiber, J.D.

Regulations

The IRS issued proposed regulations to raise user fees for installment agreements from $105 to $120 and for offers in compromise from $150 to $186. The new fees are scheduled to take effect Jan. 1, 2014 (REG-144990-12). The user fees have not been raised since 2007 for installment agreements and since 2003 for offers in compromise.

The fee for installment agreements that are paid by direct debit from taxpayers’ bank accounts will remain $52, as will the $43 fee for low-income taxpayers (defined in Regs. Sec. 300.1(b)(2)), but the fee for restructuring or reinstating an installment agreement will rise from $45 to $50.

While offers in compromise will now cost $186 instead of $150, there will continue to be exceptions for low-income taxpayers (defined in Regs. Sec. 300.3(b)(1)(ii)) and for taxpayers for whom the offer is based on a doubt as to liability. Both of those groups will continue to pay no fee.

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