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The IRS is proposing a substantial increase in the user fee it charges taxpayers who seek to pay the taxes they owe through the agency’s installment agreement program. But, as a means of balance, if the taxpayer chooses more online and automatic deduction options, the fee will be greatly reduced compared to 2016 rates.
Currently, it costs $120 to apply for the payment agreement which sets the taxpayer up to pay off the tax amount owed month-by-month. The application fee can be lowered to $52 for a taxpayer who agrees to have the payment automatically deducted as direct debits (auto-debits) from their bank account.
Under proposed changes, the new application fee would be $225 or may be lowered to $107 if the taxpayer agrees to auto-debits. Taxpayers who apply online, but pay by check or through the online EFTPS system would pay a $149 fee. The fee would lower considerably to $31 if the taxpayer chooses an all-digital option by applying online and agreeing to auto-debits.
Taxpayers have the option of contacting the IRS online, in person, by phone or by mail to set up an installment agreement. As the tax collection agency continues to update software and systems, it is finding new ways to utilize the internet to speed up the time it takes to file and process a return, collect tax payments and administer tax refunds.
