Paying off a tax debt through an installment agreement with the Internal Revenue Service involves a variety of things. One is paying a user fee to the IRS.
How much is this fee? Currently, the regular amount for the fee is $120. However, not all taxpayers who have an installment agreement are charged at the regular rate. A different reduced fee may be available for a taxpayer depending on things such as their income level or the method they use for their installment agreement payments.
Another thing worth noting is that the regular fee for installment agreements might soon be going up. A recent IRS proposal would raise this fee to $225. On Oct. 19, a public hearing will be occurring regarding the proposal. If the proposal is ultimately approved, it would go into force at the start of next year.
Along with raising the regular fee, the proposal would also increase one (but not all) of the special alternative fees. Also, it would create some new alternative fees. These fees would regard installment agreements done online.
So, what impacts the proposed changes would have on taxpayers seeking an installment agreement would depend on the specific circumstances of the taxpayer.
This underscores a major overall point when it comes to tax debts: individual circumstances matter considerably when a person is facing such a debt. A taxpayer’s unique situation impacts what opportunities and requirements would be present for them when it comes to the different options for addressing a tax debt. Experienced tax lawyers can advise individuals with a tax debt on what their particular situation means for their options for dealing with the debt.
Source: AccountingWEB, “IRS Looks to Revise User Fees for Installment Agreements,” Jason Bramwell, Aug. 22, 2016