December 2, 2013 11:36 am

IRS Raises Payment Arrangement Fees

If you need more time or other help in paying your taxes, it will cost you more now. Starting December 2, 2013, the fee for obtaining an installment payment agreement from the IRS is $120, up from $105. The fee for restructuring or reinstating an installment payment agreement rises to $50, from $45. The processing fee for an offer in compromise, which reduces the tax to be repaid, is $186; it used to be $150.

Some fees have not been changed. The fee for a direct debit installment agreement stays at $52. The fee for low-income taxpayers to obtain an installment payment agreement remains at $43.

Source: TD 9647

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Tax Glossary

Withholding

An amount taken from income as a prepayment of an individual’s tax liability for the year. In the case of wages, the employer withholds part of every wage payment. Backup withholding from dividend or interest income is required if you do not provide the payer with a correct taxpayer identification number. Withholding on pensions and IRAs is automatic unless you elect to waive withholding.

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