The Department of the Treasury and the IRS have proposed regulatory changes regarding the payment of taxes through commercially acceptable means on 2 July, 2024.
These updates align with the legislative changes introduced by the Taxpayer First Act, which permits the IRS to accept tax payments directly via credit or debit card. This eliminates the need for third-party payment processors, as mentioned in the release RIN 1545-BP66.
Presently, the IRS utilises third-party processors to process payment of taxes by credit cards, which includes charge cards and debit cards for which taxpayers pay a processing fee directly to the third-party processor.
Third-party processors charge a variable percentage fee for payment by credit card and a flat fee for payment by debit card.
The proposed changes will enable the IRS to receive similar benefits as other entities that accept credit or debit cards, including guaranteed receipt of funds and reduction of paper check processing costs.
It will also enable taxpayers to make a payment more easily by credit or debit card directly to the IRS, such as over the telephone, without having to separately wait for the IRS to connect them to third-party processors.
