IRS Proposes User Fee for Certain Offer-In-Compromise
IR-2002-118, Nov. 5, 2002
– The Internal Revenue Service today issued
proposed regulations, which, if adopted, would require
a $150 user fee for many Offers-In-Compromise(OIC).
A taxpayer would normally be required to pay the
user fee at the time the OIC request is submitted.
taxpayers – those whose incomes fall below
the poverty line – would be exempt from the
fee. For this purpose, the proposed regulations
would authorize the IRS to use the poverty guidelines
published by the Department of Health and Human
Services, or some other measure.
addition, OICs based on doubt as to liability only
(where doubt exists that the tax assessed is correct)
would also be exempt from the user fee. The fee
would be refunded in certain other situations, described
in the proposed regulations.
OIC is an agreement between a taxpayer and the IRS
that resolves the taxpayer's tax liability. Under
certain circumstances, the IRS has the authority
to settle, or compromise, federal tax liabilities
by accepting less than full payment.
Office of Management and Budget encourages federal
agencies to implement user fees to recover the cost
of providing special services to some recipients
that others do not use. Accordingly, the proposed
fee is designed to recover part of the cost of processing
OIC requests and evaluating the taxpayer's ability
to pay. This user fee proposal was developed with
input from tax professionals, Low-Income Taxpayer
Clinics and the IRS Taxpayer Advocate.
or electronic comments on the proposed regulations
must be received by February 4, 2003. A public hearing
on the proposed regulations will be held in Washington,
D.C., on February 13, 2003, at 10 a.m. at the IRS,
1111 Constitution Ave., N.W., Room 4718. Persons
who wish to present oral comments at the hearing
must submit comments and an outline of topics to
be discussed by January 23, 2003. Submissions should
be addressed to: CC:ITA:RU (REG-103777-02), Room
5226, Internal Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.