- IRS may now enter contracts allowing direct card payments without routing through third-party processors.
- Any fees paid by IRS under such contracts must be fully recouped from the taxpayer as a separate reimbursement fee.
- Rules apply to tax and reimbursement fee payments made on or after October 19, 2026.
Regulatory Change
The Internal Revenue Service published final regulations on October 19, 2026, amending 26 CFR 301.6311-2 to reflect amendments made by section 2303 of the Taxpayer First Act of 2019.
The revisions remove prior prohibitions on the IRS paying fees under contracts for credit or debit card tax payments and on charging taxpayers for such payments.
Under the new framework, the IRS may enter into contracts it determines to be cost beneficial to the government.
Contract Options and Fee Treatment
The regulations authorize two types of contracts. The first type prohibits the IRS from paying any fee, in which case card issuers or other parties may still impose fees that the IRS does not share.
The second type permits the IRS to pay a fee provided it fully recoups that amount from the taxpayer as a reimbursement fee paid at the time of the tax payment. This fee is not part of the tax liability and cannot be refunded or credited.
In negotiating contracts that involve fees, the IRS must seek to minimize the amount paid. Taxpayers choosing to pay by card will no longer need to be transferred to third-party processors for certain transactions.
Error Resolution and Applicability
Payments of taxes and any reimbursement fees remain subject to error resolution procedures under the Truth in Lending Act, Electronic Fund Transfer Act, or similar state laws for issues related to the card account itself. These procedures do not apply to disputes over the underlying tax liability.
The final regulations apply to payments of taxes and reimbursement fees made on or after October 19, 2026.
The IRS received eight comments on the proposed rulemaking issued in 2024. Most expressed support for simplifying the payment process, though some comments addressed matters outside the scope of the regulations.
Questions for Taxpayers
Taxpayers should verify acceptable payment methods, applicable reimbursement fees, and any associated costs through official IRS channels before making a payment.
Individuals or businesses with existing tax debt questions unrelated to this direct-payment change may wish to consult a professional. Republic Tax Relief offers a free, no-obligation initial consultation to evaluate private tax-resolution services for IRS or state tax issues and can discuss suitability, scope, fees and availability of help communicating with the IRS.
Announcement covered: Oct 19, 2026.
General information only, not individual tax, legal, or financial advice. Rules, deadlines, and eligibility depend on your circumstances. Check current official guidance or consult a qualified professional.
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