IRS Hikes Fees For Advanced Rulings

by Mike Godfrey, Tax-News.com, Washington

06 January 2006

Following a little-publicised announcement earlier this week, the Internal Revenue Service is to dramatically hike some of the fees that it charges for advice and advanced rulings to business and individual taxpayers on certain complex tax issues.

According to a report in the New York Times, starting next month, the IRS will charge anything from $500 to $3,000 for an advance ruling on the tax consequences of unusual rollovers from 410(k) plans into other types of retirement account. Last year, the agency charged just $95 for the same service.

In other areas, business owners enquiring about their simplified employee pension plans face a fee of $9,000, up from $2,750, while multinational businesses that need to know the amount of tax they owe on imported goods will have to pay as much as $50,000 - ten times last year's minimum fee.

IRS spokesman Terry Lemons was quoted by the Times as explaining that the new fees "more accurately reflect the cost to us of delivering the service," and the agency also points out that certain fees for less well-off taxpayers are being reduced or eliminated next year, while mutual funds, insurance firms and marketers of retirement plans will see fees cut to $200 from $280.

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