User Fees for Processing Installment Agreements, 78074-78075 [E6-22257]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 71, Number 249 (Thursday, December 28, 2006)]
[Rules and Regulations]
[Pages 78074-78075]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-22257]



[[Page 78074]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 300

[TD 9306]
RIN 1545-BF69


User Fees for Processing Installment Agreements

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains amendments to the regulations relating 
to user fees for installment agreements. The amendments update the fees 
to reflect the actual costs of the services provided and create an 
exception to the increased fee for entering into installment agreements 
for low-income taxpayers. The amendments affect taxpayers who wish to 
pay their liabilities through installment agreements.

DATES: Effective Date: These regulations are effective on December 28, 
2006.
    Applicability Date: These regulations apply to installment 
agreements entered into, restructured, or reinstated on or after 
January 1, 2007.

FOR FURTHER INFORMATION CONTACT: Concerning cost methodology, Eva 
Williams, 202-435-5514; concerning the regulations, William Beard, 202-
622-3620 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains amendments to 26 CFR part 300. On August 30, 
2006, a notice of proposed rulemaking (REG-148576-05) relating to the 
user fees charged for processing installment agreements was published 
in the Federal Register (71 FR 51538). The charging of user fees 
implements the Independent Offices Appropriations Act (IOAA), which is 
codified at 31 U.S.C. 9701. The notice of proposed rulemaking proposed 
an increase in the amount of the user fees to reflect the full cost of 
the service provided, as directed by OMB Circular A-25, 58 FR 38142 
(July 15, 1993) (the OMB Circular).
    The notice of proposed rulemaking proposed to increase the fee 
under Sec.  300.1 for entering into an installment agreement from $43 
to $105 and to increase the fee under Sec.  300.2 for restructuring an 
installment agreement from $24 to $45. The notice of proposed 
rulemaking also proposed an exception to the full-cost requirement in 
cases where the taxpayer chooses to pay by way of a direct debit from 
the taxpayer's bank account. The OMB Circular allows the Office of 
Management and Budget to grant a waiver of the full cost requirement 
and, pursuant to such a waiver, the proposed fee for entering into a 
direct-debit agreement was $52 to encourage this type of payment.
    No public hearing on the notice of proposed rulemaking was held 
because no one requested to speak. Eight comments were received. After 
consideration of all the comments, this Treasury decision adopts the 
proposed regulations with the following change: the fee for entering 
into an installment agreement will remain $43 for low-income taxpayers, 
that is, taxpayers whose incomes fall at or below 250% of the dollar 
criteria established by the poverty guidelines updated annually in the 
Federal Register by the U.S. Department of Health and Human Services or 
such other measure as the Secretary may adopt. The IRS sought and 
received an additional waiver from OMB to charge less than full cost to 
low-income taxpayers.

Summary of Comments and Explanation of Revisions

    Of the eight comments on the proposed regulations, five stated that 
the increased fees would have an adverse impact on low-income 
taxpayers. Other commentators stated that many low-income taxpayers do 
not have bank accounts and cannot take advantage of the reduced fee for 
direct-debit installment agreements. To accommodate these concerns, the 
final regulations except low-income taxpayers from the increase of the 
fee for entering into an installment agreement. Therefore the fee for 
entering into an installment agreement remains $43 for low-income 
taxpayers, that is, taxpayers whose income fall at or below 250% of the 
dollar poverty criteria established by the U.S. Department of Health 
and Human Services. The exception does not apply to the fee for 
restructuring or reinstating an installment agreement.
    Other commentators recommended that the installment agreement user 
fee be reduced for any taxpayer who requests an agreement on-line (over 
the internet). Under the IOAA, user fees should be fair and based on 
the costs to the government, the value of the service to the recipient, 
and the public policy or interest served. No exception was created for 
installment agreements requested on-line because the benefit of the 
installment agreement program to the taxpayer does not change depending 
on the how the installment agreement is requested, the convenience of 
on-line requests provides ample incentive for this type of application 
for taxpayers who have internet access, and taxpayers who do not have 
internet access could not take advantage of the lower fee. The IRS 
intends to consider a cost methodology for installment agreement user 
fees that reflects cost differences attributable to various types of 
installment agreements, as well as whether additional exceptions to 
full cost are warranted.

Special Analyses

    It has been determined that this notice of rulemaking is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It is hereby 
certified that these regulations will not have a significant economic 
impact on a substantial number of small entities. Accordingly, a 
regulatory flexibility analysis is not required. This certification is 
based on the information that follows. The economic impact of these 
regulations on any small entity would result from the entity being 
required to pay a fee prescribed by these regulations in order to 
obtain a particular service. The dollar amount of the fee is not, 
however, substantial enough to have a significant economic impact on 
any entity subject to the fee. Pursuant to section 7805(f) of the 
Internal Revenue Code, the notice of proposed rulemaking preceding this 
regulation was submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small business.
    Although the Administrative Procedures Act prescribes a thirty-day 
waiting period between the date of publication in the Federal Register 
and the applicability date, this regulation is being made applicable 
after a shorter period under the authority provided by section 
7805(b)(1)(B).

Drafting Information

    The principal author of these regulations is William Beard, Office 
of Associate Chief Counsel (Procedure and Administration), Collection, 
Bankruptcy and Summonses Division.

Lists of Subjects in 26 CFR Part 300

    Reporting and recordkeeping requirements, User fees.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 300 is amended as follows:

PART 300--USER FEES

0
Paragraph 1. The authority citation for part 300 continues to read as 
follows:


[[Page 78075]]


    Authority: 31 U.S.C. 9701.

0
Par. 2. Section 300.0 is amended by revising paragraph (c) to read as 
follows:


Sec.  300.0   User fees; in general.

* * * * *
    (c) Effective date. This part 300 is applicable March 16, 1995, 
except that the user fee for processing offers in compromise is 
applicable November 1, 2003; the user fee for the special enrollment 
examination, enrollment, and renewal of enrollment for enrolled agents 
is applicable November 6, 2006; the user fee for entering into 
installment agreements on or after January 1, 2007, is applicable 
January 1, 2007; and the user fee for restructuring or reinstatement of 
an installment agreement on or after January 1, 2007, is applicable 
January 1, 2007.
0
Par. 3. Section 300.1 is amended by revising paragraph (b) to read as 
follows:


Sec.  300.1  Installment agreement fee.

* * * * *
    (b) Fee. The fee for entering into an installment agreement before 
January 1, 2007, is $43. The fee for entering into an installment 
agreement on or after January 1, 2007, is $105, except that:
    (1) The fee is $52 when the taxpayer pays by way of a direct debit 
from the taxpayer's bank account; and
    (2) Notwithstanding the method of payment, the fee is $43 if the 
taxpayer is a low-income taxpayer, that is, an individual who falls at 
or below 250% of the dollar criteria established by the poverty 
guidelines updated annually in the Federal Register by the U.S. 
Department of Health and Human Services under authority of section 
673(2) of the Omnibus Budget Reconciliation Act of 1981 (95 Stat. 357, 
511), or such other measure that is adopted by the Secretary.
* * * * *
0
Par. 4. Section 300.2 is amended by revising paragraph (b) to read as 
follows:


Sec.  300.2  Restructuring or reinstatement of installment agreement 
fee.

* * * * *
    (b) Fee. The fee for restructuring or reinstating an installment 
agreement before January 1, 2007, is $24. The fee for restructuring or 
reinstating an installment agreement on or after January 1, 2007, is 
$45.
* * * * *

Kevin M. Brown,
Acting Deputy Commissioner for Services and Enforcement.
    Approved: December 21, 2006.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
 [FR Doc. E6-22257 Filed 12-27-06; 8:45 am]
BILLING CODE 4830-01-P