Starting Monday, Oct. 19, the IRS has regulatory permission to do something it has been barred from doing since 2001: pay a card processor itself and pass that bill on to the taxpayer. Treasury and the IRS published final regulations (TD 10060, FR Doc. 2026-21267, 91 FR 65980) amending 26 CFR 301.6311-2 to implement section 2303 of the Taxpayer First Act. The rule is effective the day it publishes and applies to payments of tax and reimbursement fees made on or after Oct. 19, 2026.
The stated purpose is convenience: letting taxpayers pay by credit or debit card directly to the IRS, including over the telephone, without being handed off to a third-party processor. But the regulation grants authority rather than launching a service. The preamble says the rules “do not actually implement any particular payment process or contract.” And under either model, the processing cost stays with the person paying by card.
1. What the 2001 rule prohibited
Before the Taxpayer First Act (Public Law 116-25, July 1, 2019), section 6311(d)(2) of the tax code let Treasury contract for card-payment services but prohibited it from paying “any fee or other consideration” under those contracts. The existing regulation, adopted as TD 8969 (66 FR 64740) on Dec. 14, 2001, carried that ban in paragraph (f). Paragraph (e) separately barred the IRS from imposing any fee or charge on people paying by card.
That combination produced the model taxpayers know: outside processors charge the cardholder directly, and the IRS neither pays nor collects a fee. Section 2303 of the 2019 law added an exception. The Secretary may now pay a fee under such a contract “to the extent that the Secretary ensures that any such fee is fully recouped” from the people paying by card, in the words the preamble uses to describe the amendment.
| Question | Existing rule (TD 8969, 2001) | Final rule (TD 10060, 2026) |
|---|---|---|
| May the IRS pay a fee under a card contract? | No, para. (f) | Yes, if fully recouped, new para. (e)(3) |
| May the IRS charge card payers a fee? | No, para. (e) | Para. (e) removed; reimbursement fee capped at the fee the IRS pays |
| Third-party processors charging cardholders | Permitted | Still permitted under no-fee contracts, new para. (e)(2) |
| Condition on any contract | Not specified in this rule | Must be “cost beneficial to the government,” new para. (e)(1) |
| Applies to payments made | Since 2001 | On or after Oct. 19, 2026 |
2. Two kinds of contracts
The revised regulation lets the Commissioner choose between two structures. Under new paragraph (e)(2), the IRS pays nothing and third parties may charge fees, as now. The IRS “may not receive any part of any such fees.” Under new paragraph (e)(3), the IRS pays the processor and recovers the cost.
If the IRS pays a fee under such contracts, it must recoup the full amount paid under such contracts as a reimbursement fee from the persons paying tax by credit card or debit card. The reimbursement fees will be limited to the amount of the fees that IRS pays under any such contract and will be paid at the time of, and in addition to, the tax payment.
EXCERPT · 26 CFR 301.6311-2(e)(3), as revised by TD 10060
Either contract must be “cost beneficial to the government,” judged by an analysis scaled “to the size of the government’s investment or interest.” In negotiating fee-paying contracts, the Commissioner “will seek to minimize the amount of the fees paid.”
3. Who bears the fee
The cardholder does, under both structures. The rule adds three details about the new reimbursement fee. It “is not a tax imposed by the Code.” No portion of it can be refunded or credited under section 6402. And billing errors involving it fall under the error-resolution procedures of section 161 of the Truth in Lending Act and section 908 of the Electronic Fund Transfer Act, which do not reach disputes over the underlying tax liability.
The taxpayer pays the processing cost either way. What changes is who holds the contract.
One commenter supported the rule on condition that no fee attach to card payments. Treasury replied that the rule, consistent with the statute, lets the Secretary pay a fee only to the extent it is fully recouped from card payers. The government’s side of the ledger, citing the House Ways and Means report on the 2019 bill (H. Rept. 116-39(I)), is described qualitatively: “guaranteed receipt of funds and reduction of paper check processing costs.”
4. The numbers that aren’t there
The preamble contains no estimate of what the change will cost, save or bring in. The rule was not reviewed under Executive Order 12866, citing a July 4, 2025, memorandum of agreement between Treasury and OMB on tax regulations, so “a regulatory impact assessment is not required.” OIRA designated it not a major rule under the Congressional Review Act, and Treasury found no mandate above the Unfunded Mandates Reform Act threshold of $100 million in 1995 dollars.
The Regulatory Flexibility Act certification gives the agencies’ reasoning on cost to taxpayers: “Because persons choosing to pay tax by credit or debit card are ordinarily required to pay processing fees to a third-party processor, the final regulations would not have a significant economic impact on such persons.”
The sharpest objection came from a commenter who argued the IRS must run a cost comparison under OMB Circular A-76, warning that the rule “would potentially unwind the longstanding policy of the Federal Government to contract with the private sector to provide purely commercial services such as card payment processing.” Treasury called the comparison beyond the rule’s scope but said any applicable Circular requirements “will be met upon implementation.” Another commenter asked for a better fee reimbursement model; that, too, was ruled out of scope.
The record is thin. The July 2, 2024, proposal (REG-120137-19, 89 FR 54746) drew eight comments, mostly supportive. A public hearing was cancelled because no one asked to speak, and the final text matches the proposal word for word.
5. What happens next
- Oct. 19, 2026: the rule takes effect and applies to tax payments and reimbursement fees made on or after that date.
- Contracting, no date set: any direct card-payment channel depends on the Commissioner signing a contract under paragraph (e)(2) or (e)(3), each subject to the cost-benefit test. The rule sets no timeline.
- A-76 review: to the extent card collection is covered by the Circular, Treasury says those activities will continue to be reviewed at implementation.
The rule was approved Sept. 10, 2026, by Kevin M. Salinger, Acting Assistant Secretary of the Treasury for Tax Policy, and signed by Frank J. Bisignano, Chief Executive Officer. With the IRS also preparing its 2027 inflation adjustments, the authority is in place before next filing season. Whether a contract follows is up to the Commissioner.
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