IRS increases the fee for Offers in Compromise to $205

2020-03-13

The increase in offer in compromise (OIC) user fee from $186 to $205 applies to offers filed after April 27, 2020.

When an OIC is accepted, the user fee is either applied against the amount to be paid under the offer or refunded to the taxpayer if the taxpayer requests a refund pursuant to §300.3(b)(2).

Offers based on doubt as to liability and offers from low-income taxpayers, as defined in §300.3(b)(1)(ii), would continue to be excepted from a user fee.

Section7122(c)(3) exempts certain low-income taxpayers, with adjusted gross income, as determined for the most recent taxable year for which such information is available, which does not exceed 250% of the applicable poverty level (as determined by the Secretary of the Treasury or his delegate), from payment of the offer in compromise user fee otherwise, offers in compromise submitted after July 1, 2019.

The Independent Offices Appropriations Act of 1952 (IOAA) states that the services provided by an agency should be self-sustaining to the extent possible. 31 U.S.C. 9701(a), and requires the IRS will continue to biennially review the user fee. The full cost to the IRS for an offer in compromise was determined to be $2,374.

TD 9894