The IRS has announced (IR-2017-102) that, on June 15, 2017, it will begin a two-month transition to an electronic payment system for user fees relating to letter rulings and similar requests. Taxpayers may begin submitting user fee payments electronically on June 15, and only electronic payments will be accepted after August 15, 2017.

Affected ruling requests

The new electronic payment system applies to all rulings described in Revenue Procedure 2017-1 that are sent to the Docket, Records and User Fee Branch of the Legal Processing Division of the Associate Chief Counsel (Procedure and Administration) (CC:PA:LPD:DRU). This includes private letter rulings (including requests for 9100 relief), closing agreements, and other ruling requests using Form 1128, 2553, 3115 or 8716.

The change does not affect determination letters, which are required to be sent to other offices under Revenue Procedure 2017-1.

Submitting electronic payment

Electronic payments should be made on the government's pay.gov site. During the two-month transition period, taxpayers may submit payments either electronically on the pay.gov site or by check or money order, as required in the past. Electronic payment on pay.gov may be made by credit card or debit card, or by direct debit or electronic funds withdrawal from a checking or savings account.

Taxpayers should submit the user fee using the correct form on the pay.gov site: IRS Chief Counsel User Fees (or Supplemental User Fees) for Form 1128, Form 2553, Form 3115, Form 8716, Private Letter Rulings and Closing Agreements. Taxpayers will be able to locate the form using the site's search function or by selecting the IRS from the site's agency list.

Effect on ruling request submissions

Taxpayers must still submit the original, signed ruling request and related materials by mail or hand delivery to the appropriate address under Revenue Procedure 2017-1. Taxpayers should include with the paper letter ruling request a printed copy of the completed payment form and pay.gov receipt.

Implications

Taxpayers submitting ruling requests under Revenue Procedure 2017-1 after June 15, 2017, need to consider submitting electronic payment using pay.gov for the two-month transition period, and taxpayers must use electronic payment rather than check or money order for requests after August 15, 2017. It will be important to maintain proof of the completed payment form and pay.gov receipt.

Although filing fee issues may be resolved without affecting the validity of a ruling request such as a filed Form 3115 for a non-automatic method change, taxpayers should take note of this procedural change to avoid confusion that could arise if traditional payment protocols are followed (i.e., filing fee checks are submitted) and rejected by the IRS.

———————————————