IRS Proposes New User Fee for Installment Agreement

WASHINGTON - Beginning in March the Internal Revenue Service will start charging a user fee for entering into an installment agreement to pay delinquent taxes in installments and for restructuring or reinstating an installment agreement.

The fee for entering into an installment agreement will be $43. The fee for restructuring or reinstating an installment agreement will be $24.

Proposed regulations were filed today that implement the new fees. The Office of Management and Budget encourages such fees so that agencies can recover their costs for providing special services to some recipients that others do not use.

The new fees are based on the cost to the IRS of providing the service. When a taxpayer requests an installment agreement, the IRS must first determine whether such an agreement is appropriate, then set up the agreement, process payments and monitor for conformance with the agreement. Before restructuring or reinstating an installment agreement, the IRS must monitor for nonconformance, analyze why the agreement is in noncompliance, correspond with the taxpayer, analyze the taxpayer's response, and, if appropriate, restructure or reinstate the agreement.

A public hearing on the proposed regulation implementing the new fee will be held on January 20 in the IRS auditorium, 1111 Constitution Ave. N.W., Washington, DC.

Requests to speak at the hearing must be received by January 17. The IRS also welcomes written comments. Comments must be received by January 27. Requests to speak and comments should be addressed to: Internal Revenue Service; CC:DOM:CORP:T:R (PS-3994); Room 5228; P.O. Box 7604; Ben Franklin Station; Washington, D.C. 20044.

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