Sponsor
Michael F. Bennet
Senator · D-CO
The bill removes installment-setup fees for recent low- and moderate-income filers to lower the financial barrier to repaying tax debts, at the cost of a delayed start, potential misclassification for those with falling incomes, a hard eligibility cutoff that leaves some paying fees, and modest lost fee revenue.
Low- and moderate-income taxpayers (AGI ≤ 250% of the federal poverty level) will no longer be charged IRS installment-agreement setup fees when creating payment plans, reducing the direct out-of-pocket cost of resolving tax debts.
Eligible taxpayers (those meeting the AGI threshold) will face fewer upfront financial barriers to entering installment agreements, making it easier to resolve tax debts without needing asset tests or individualized hardship determinations.
Relief eligibility is tied to recent AGI data rather than more complex case-by-case rules, which can simplify administration and target relief toward those with recent lower income.
There is a 12-month delay before the fee waiver takes effect, so low-income taxpayers with immediate need will not receive relief right away.
Taxpayers whose current income has fallen below the threshold may be misclassified because eligibility uses prior-year AGI, leaving some needy people ineligible despite recent income loss.
Taxpayers with AGI just above 250% of the poverty level will continue to pay installment-agreement fees, creating a cliff effect that can leave some middle-income filers bearing costs.
Based on analysis of 1 section of legislative text.
Waives IRS installment-agreement fees for taxpayers with AGI up to 250% of the federal poverty guideline for agreements entered more than 12 months after enactment.
Senator · D-CO
Eliminates the IRS fee for entering into an installment agreement for taxpayers whose adjusted gross income in the most recent year available is at or below 250% of the applicable federal poverty guideline. The fee waiver applies only to installment agreements established more than 12 months after the bill becomes law.
Official title: Amend the Internal Revenue Code of 1986 to eliminate installment agreement fees for certain individuals.
Introduced July 28, 2026 by Michael F. Bennet · Last progress July 28, 2026