Washington (Nov. 6, 2002) -- If adopted, new regulations proposed by the Internal Revenue Service will require a $150 user fee for many Offers-In-Compromise. A taxpayer would normally be required to pay the user fee at the time the request is submitted.Low-income 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.

In 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.

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.

-- Electronic Accountant Newswire staff

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