The IRS has finalized a rule that allows it to directly accept tax payments via credit and debit card without having to connect taxpayers to third-party payment processors. The changes implement provisions of the 2019 Taxpayer First Act. (T.D. 10060, 10/19/2026)
Background
Under the prior regulations, the IRS contracted with third parties to process tax payments made by credit and debit cards. Taxpayers seeking to use these payment methods were directed to a separate webpage to make their tax payment. These taxpayers also paid a processing fee directly to an IRS-approved third-party processor.
While the IRS was able to enter into contracts to receive tax payments by credit or debit card, pre-Taxpayer First Act, the agency was prohibited from paying a fee for these services. Prior regulations also prohibited the IRS from imposing a fee on taxpayers making payments by credit or debit card.
The Taxpayer First Act, however, amended IRC § 6311(d)(2) to give the IRS discretion to pay fees associated with credit and debit card use. It also requires the agency to fully recoup fees from taxpayers using these payment methods.
Rule finalizes proposal without change
In 2024, the IRS proposed amendments to Reg. § 301.6311-2 to implement the Taxpayer First Act provisions. The agency has now finalized that proposal without change.
The final regulations allow the IRS to contract with third-party processors even when the agency will be required to pay a processing fee. The IRS, however, must minimize fees it is required to pay under its contract.
The final rule also allows the IRS to recoup processing fees paid on behalf of a taxpayer as a reimbursement. Taxpayers will be required to pay the reimbursement at the time they make their tax payment by credit or debit card. The IRS, however, may not retain any portion of the processing fees charged.
In addition, the final rule provides that the IRS can only enter contracts with third-party processors when the contract is “cost beneficial to the government.”
The rule is effective October 19, 2026.
For more on media that may be used to make tax payments, see Checkpoint’s Federal Tax Coordinator 2d ¶ S-5750.
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