IRS Finalizes Fee Increase for Offers in Compromise (2)

The IRS raised the fee for processing an offer in compromise, an agreement between the agency and a taxpayer to settle a tax debt for less than the full amount that is owed.

The Thursday final rules set the fee for processing an offer at $205 from $186, a 10% increase. The proposed rules called for raising the fee to $300. The agency is allowed to charge a user fee under Section 7122.

The fee amount is “substantially less” than the full cost the agency faces in providing the service, according to the rules (T.D. 9894).

Practitioners ...