Preparer Due Diligence
Update on Section 4980D Excise Tax for HRAs

Changes to Installment Agreements

The IRS has a pilot program for expanded streamline installment agreements that runs September 2016 to September 2017. The SB/SE Campus Collection Operations, including the Automated Collection System (ACS), has expanded installment agreement criteria for individual taxes, self-employment taxes and out-of-business sole proprietors with assessed tax, penalty and interest between $50,000 and $100,000 and from 72 to 84 months automatic installment (if proposed monthly payment is the greater of their total assessed balance divided by 84 months or amount necessary to satisfy the liability before the collection statute expires). If the test is successful, it will provide easier access to installment agreements for more taxpayers and fewer IRS resources to manage. Installment agreements in SB/SE Field Collection (cases assigned by revenue officers), W & I Accounts Management or through the Online Payment Agreement Application do not qualify for this pilot program.

Effective Jan. 1, 2017, the IRS increased user fees for taxpayers to pay off their federal income tax debt. Under the revised schedule, affected taxpayers could lower the installment agreement fee by choosing an online payment agreement or direct debit from a bank account.

User Fee Category

Previous Fee

Fee as of Jan. 1, 2017

Regular installment agreement 1

$120

$225

Regular installment agreement with direct debit (DDIA) 2

$52

$107

Low income installment agreement (regular or DDIA)

$43

$43

Online payment agreement -- regular installment agreement 3

$120

$149

Online payment agreement -- Direct debit installment agreement (DDIA) 4

$52

$31

Restructured/reinstated installment agreement

$50

$89

Restructured/reinstated low income installment agreement (new fee)

--

$43

User fee table notes:

  1. Apply by submitting Form 9465, Installment Agreement Request (PDF), by contacting a telephone assistor or at an IRS walk-in office. Choose to make payments by means other than direct debit.
  2. Apply by submitting Form 9465, by contacting a telephone assistor or at an IRS walk-in office. Choose to make payments by direct debit from a bank account.
  3. Apply online. Choose to make payments by means other than direct debit.
  4. Apply online. Choose to make payments by direct debit from a bank account. Lowest cost choice.

In addition, the IRS has increased the Offer in Compromise (OIC) user fee from $186 to $300 for OICs submitted on or after Feb. 27, 2017. Pursuant to IRS proposed regulations, the increase is to bring the user fee closer to the IRS’ actual cost of processing an OIC, which is $2,450.

Read more:

https://www.federalregister.gov/documents/2016/10/13/2016-24666/user-fees-for-offers-in-compromise

https://www.irs.gov/businesses/small-businesses-self-employed/streamlined-processing-of-installment-agreements?_ga=1.206997840.254687510.1449240952

Comments

Patricia Lewis

I have payment agreement for 2016 taxes. Payments automatic monthly from checking account $50. Am I able to include my tax debt for 2017 $2034.to this account? Hopefully next year I will not have this problem.

hank You

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)