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Tax Policy and Administration: IRS User Fees

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Report Type Reports and Testimonies
Report Date Dec. 15, 1994
Report No. GGD-95-58R
Subject
Summary:

Pursuant to a legislative requirement, GAO reviewed the fee structure and methodology used by the Internal Revenue Service (IRS) in developing user fees, focusing on whether the proposed fees reflect IRS actual costs. GAO noted that: (1) IRS has proposed flat fees for installment agreements for taxpayers with smaller balances and those who pay their agreements off quickly; (2) taxpayers with agreements of more than $10,000 should pay a higher fee, since IRS incurs higher costs in establishing their agreements; (3) while a single flat fee for new agreements is easier and less costly to administer, separate fees may be more equitable; (4) it could not determine whether the proposed fees reflect IRS actual costs; and (5) the lack of specific cost data available to IRS in developing the proposed installment agreement user fees underscores the need for an activity-based cost system.

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