IRS finalizes regulations for direct credit and debit card tax payments

The U.S. Department of the Treasury and the IRS have issued final regulations (TD 10060) that allow the agency to accept tax payments directly via credit or debit card. This change implements provisions from the Taxpayer First Act, removing previous prohibitions that prevented the IRS from paying processing fees under such contracts.

Under the new framework, the IRS may enter into contracts to pay card processing fees, provided that these costs are fully recovered from the taxpayers making the payments. Any reimbursement fees collected must be paid at the time of the tax payment and are not eligible for refunds or credits.

The regulations aim to simplify the payment process, reduce paper-check processing costs, and provide taxpayers with more convenient options, such as making payments by telephone without being routed through third-party processors. The rules apply to tax payments and reimbursement fees made on or after the date the regulations are published in the Federal Register.