IRS Explains Increase in Cost to Obtain an Installment Agreement

Posted on September 12, 2016

If you are a regular reader of this blog, you recently learned that the IRS has proposed to increase the cost of user fees associated with obtaining an installment agreement for taxpayers that would like to repay their debt to the IRS with monthly installment agreement payments.

The IRS recently explained how they arrived at the proposed increase in user fees by analyzing what it spent to grant installment agreements to taxpayers during the fiscal years 2013 and 2014. The IRS estimated that it spent $110,143,952.00 to establish non-online installment agreements. This figure includes labor, paper, postage and related costs.

The IRS then broke down its costs to establish and maintain installment agreements and determined that the increase in user fees for each type of installment agreement should be increased or adjusted. As a result, effective January 1, 2017, the cost for the following types of installment agreements will be increased as follows:

	Regular Installment Agreements	Direct Debit Installment Agreements	Reinstated Installment Agreements	Online Payment Agreements	Installment Agreements	Low-income Taxpayer User fee
Rate	$225.00	$107.00	$89.00	$31.00	$149.00	$43.00

The IRS also discussed the total number of installment agreements it had in its inventory at the end of fiscal year 2014. The IRS had 3,084,844 regular installment agreements, 888,364 direct debit installment agreements and 1,082,303 reinstated installment agreements, for a total of 5,055,511 installment agreements.

Do you owe money to the IRS and would like an installment agreement? Call us, we can help.