Regulations Regarding Payment of Tax by Commercially Acceptable Means

Issuing agencies

Abstract

This document contains final regulations regarding the payment of tax by commercially acceptable means. The final regulations reflect changes to the law made by the Taxpayer First Act that would allow the IRS to directly accept payments of tax by credit or debit card, without having to connect taxpayers to third-party payment processors. These final regulations remove restrictions on the payment of any fee by the IRS under any contracts related to payment of taxes by credit, debit, or charge card, and on the IRS imposing any fee or charge on persons paying taxes by credit or debit card.

Full Text

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<title>Federal Register, Volume 91 Issue 200 (Monday, October 19, 2026)</title>
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[Federal Register Volume 91, Number 200 (Monday, October 19, 2026)]
[Rules and Regulations]
[Pages 65980-65982]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21267]



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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 10060]
RIN 1545-BP66


Regulations Regarding Payment of Tax by Commercially Acceptable 
Means

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final rule.

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SUMMARY: This document contains final regulations regarding the payment 
of tax by commercially acceptable means. The final regulations reflect 
changes to the law made by the Taxpayer First Act that would allow the 
IRS to directly accept payments of tax by credit or debit card, without 
having to connect taxpayers to third-party payment processors. These 
final regulations remove restrictions on the payment of any fee by the 
IRS under any contracts related to payment of taxes by credit, debit, 
or charge card, and on the IRS imposing any fee or charge on persons 
paying taxes by credit or debit card.

DATES: 
    Effective date: These final regulations are effective on October 
19, 2026.
    Applicability date: For date of applicability, see Sec.  301.6311-
(g).

FOR FURTHER INFORMATION CONTACT: Crystal Jackson-Kaloz of the Office of 
the Associate Chief Counsel (Procedure and Administration), (202) 317-
5191 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Authority

    This document contains amendments to the Procedure and 
Administration Regulations (26 CFR part 301) issued by the Secretary of 
the Treasury or the Secretary's delegate (Secretary) under the 
authority granted by sections 6311 and 7805(a) of the Internal Revenue 
Code (Code) regarding the payment of internal revenue taxes by 
commercially acceptable means.
    Section 6311(a) provides an express delegation of authority to the 
Secretary, stating that the Secretary may receive payment of internal 
revenue taxes by any commercially accepted means under conditions 
provided by regulations prescribed by the Secretary. Section 
6311(d)(1)(A) directs the Secretary to prescribe regulations as the 
Secretary deems necessary to receive payment by commercially acceptable 
means, including regulations that specify which methods of payment by 
commercially acceptable means will be accepted.
    Section 7805(a) authorizes the Secretary to ``prescribe all needful 
rules and regulations for the enforcement of [the Code], including all 
rules and regulations as may be necessary by reason of any alteration 
of law in relation to internal revenue.''

Background and Explanation of Provisions

    This document contains final regulations under section 6311. These 
final regulations amend provisions of Sec.  301.6311-2 of the existing 
regulations (existing Sec.  301.6311-2) to implement the changes made 
to section 6311 by section 2303 of the Taxpayer First Act (TFA), Public 
Law 116-25, 133 Stat. 981, 1013 (July 1, 2019).
    Section 6311(a) provides that it is lawful for the Secretary to 
receive payment for internal revenue taxes by any commercially 
acceptable means that the Secretary deems appropriate to the extent and 
under the conditions provided in regulations prescribed by the 
Secretary. Existing Sec.  301.6311-2, which was adopted by the 
publication of TD 8969 in the Federal Register (66 FR 64740) on 
December 14, 2001, authorizes payment of internal revenue taxes by 
credit or debit card so long as such payments are made in the manner 
and in accordance with the forms, instructions, and procedures 
prescribed by the Commissioner of Internal Revenue (Commissioner).
    Prior to passage of the TFA, section 6311(d)(2) authorized the 
Secretary to enter into contracts to obtain services related to 
receiving payment of taxes by credit card or debit card, or charge 
card, but prohibited the Secretary from paying any fee or other 
consideration under any such contract. Existing Sec.  301.6311-2(f) 
implements this provision. Existing Sec.  301.6311-2(e) prohibits the 
IRS from imposing any fee or charge on persons making payment of taxes 
by credit card or debit card.
    Section 2303 of the TFA amended section 6311(d)(2) by adding a 
discretionary exception whereby the Secretary is no longer prohibited 
from paying a fee under a contract related to receiving payment of 
taxes by credit or debit card to the extent that the Secretary ensures 
that any such fee is fully recouped from the persons paying taxes by 
credit or debit card pursuant to such contract. This provision enables 
the IRS to receive benefits similar to other entities that accept 
credit or debit cards, including guaranteed receipt of funds and 
reduction of paper check processing costs. This provision also enables 
taxpayers to make a payment more easily by credit or debit card 
directly to the IRS, such as over the telephone, without having to 
separately wait for the IRS to connect them to third-party processors. 
See H. Rept. 116-39(I), 116th Cong., 1st Sess. at 90 (2019).\1\
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    \1\ In 2019, different versions of the TFA were introduced in 
the House and Senate and both bills contained provisions to amend 
section 6311 of the Code. H. Rept. 1957 was introduced in the House 
on March 28, 2019, and passed the House on April 9, 2019, but did 
not pass the Senate. Section 2303 of H. Rept. 1957 contained 
proposed statutory language amending section 6311(d) that was 
identical to the statutory language that was enacted a short time 
later on July 1, 2019, in section 2303 of H. Rept. 3151. Due to the 
procedural way in which H. Rept. 3151 became a vehicle for enacting 
the TFA, there are no separate House, Senate, or Conference Reports 
regarding H. Rept. 3151, which became the TFA, Public Law 116-25. 
Therefore, it is appropriate for the Treasury Department and the IRS 
to look to the House Ways and Means Committee Report for H. Rept. 
1957, the immediate predecessor to H. Rept. 3151, to understand the 
intended scope of section 2303 of the TFA.
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    On July 02, 2024, the Treasury Department and the IRS published in 
the Federal Register (89 FR 54746) a notice of proposed rulemaking 
(REG-120137-19) proposing amendments to Sec.  301.6311-2 (proposed 
regulations). In response to proposed amendments to the regulations, 
the Treasury Department and the IRS received eight comments. The 
comments are available at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. A public hearing 
was requested; however, because no one requested to speak at the public 
hearing, the hearing was cancelled. After careful consideration of the 
comments, the Treasury Department and the IRS adopt the text of the 
proposed regulations with no change.

Summary of Comments

    Most comments were supportive of the proposed amendments to the 
regulations. Commenters generally noted that the ability of taxpayers 
to pay taxes by credit or debit card directly to the IRS would simplify 
the payment process, reduce the costs to taxpayers, and would encourage 
more taxpayers to timely pay their taxes.
    One comment neither supported nor opposed the proposed amendments 
but requested that the IRS implement a better fee reimbursement model 
to improve the costs to taxpayers who pay taxes using credit or debit 
cards regardless of whether the proposed amendments are adopted. The 
concerns identified in the comment are outside the scope of these 
regulations, which do not actually implement any particular payment 
process or contract. Accordingly, a change to the proposed regulatory 
text is not necessary and the final regulations do not adopt this 
comment.

[[Page 65981]]

    Another comment expressed the view that simpler language could be 
used in the proposed regulations and that certain terms may be 
ambiguous or have multiple interpretations. The Treasury Department and 
the IRS considered these recommendations but determined that the 
language used in the proposed regulations, which these final 
regulations adopt, is drafted in a straightforward way that is 
consistent with the statutory text, and that no further changes are 
necessary.
    Another comment expressed support for the proposed regulations with 
the caveat that no fee should be associated with using a credit or 
debit card. The final regulations, consistent with the proposed 
regulations and the requirements of section 2303 of the TFA, will 
provide the Secretary with the discretion to pay a fee under a contract 
relating to receiving payment of taxes by credit or debit card to the 
extent the Secretary ensures that any such fee is fully recouped from 
the persons paying taxes by credit or debit card pursuant to such 
contract.
    Another comment argued that the IRS must undertake a cost-
comparison under Office of Management and Budget (OMB) Circular A-76 
(Circular) ``in keeping with the philosophy of'' the Federal Activities 
Inventory Reform Act of 1998 (FAIR Act), codified at 31 U.S.C. 501, 
which identifies activities that are commercial in nature. The comment 
stated that the proposed regulations ``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.'' Because neither section 6311 nor these 
regulations change the IRS's obligations under the Circular, and to the 
extent that IRS activities regarding collection of taxes by credit and 
debit card are subject to the requirements of the Circular and related 
laws, those activities will continue to be reviewed, and all applicable 
requirements will be met upon implementation of the final rule. 
Accordingly, the Treasury Department and the IRS have determined that 
the requested cost comparison is beyond the scope of these regulations.
    Finally, the Treasury Department and the IRS received one submitted 
comment that did not address the proposed regulations.

Special Analyses

I. Regulatory Planning and Review

    These regulations are not subject to review under section 6(b) of 
Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 
2025) between the Treasury Department and the OMB regarding review of 
tax regulations. Therefore, a regulatory impact assessment is not 
required.

II. Regulatory Flexibility Act

    It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities 
pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6). This 
certification is based on the fact that the regulation would apply only 
to the IRS's ability to (1) pay a fee under a contract related to 
receiving payment of taxes by credit or debit card, and (2) recoup 
processing fees from the person paying taxes by credit or debit card. 
Under existing regulations, the IRS may not do either of those things. 
These final regulations would also implement a requirement under the 
TFA that the IRS must seek to minimize any fee the IRS is required to 
pay under such a contract. 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.

III. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain other actions before issuing a final rule that includes any 
Federal mandate that may result in expenditures in any one year by a 
State, local, or Tribal government, in the aggregate, or by the private 
sector, of $100 million in 1995 dollars, updated annually for 
inflation. This rule does not include any Federal mandate that may 
result in expenditures by State, local, or Tribal governments, or by 
the private sector in excess of that threshold.

IV. Executive Order 13132: Federalism

    Executive Order 13132 (Federalism) prohibits an agency from 
publishing any rule that has federalism implications if the rule either 
imposes substantial, direct compliance costs on State and local 
governments, and is not required by statute, or preempts State law, 
unless the agency meets the consultation and funding requirements of 
section 6 of the Executive order. These regulations do not have 
federalism implications and do not impose substantial direct compliance 
costs on State and local governments or preempt State law within the 
meaning of the Executive order.

V. Small Business Administration

    Pursuant to section 7805(f) of the Code, the notice of proposed 
rulemaking preceding this regulation was submitted to the Chief Counsel 
for the Office of Advocacy of the Small Business Administration for 
comment on its impact on small business, and no comments were received.

VI. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Drafting Information

    The principal author of these regulations is Crystal Jackson-Kaloz 
of the Office of the Associate Chief Counsel (Procedure and 
Administration). However, other personnel from the Treasury Department 
and the IRS participated in their development.

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, the Treasury Department and IRS amend 26 CFR part 301 
as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 is amended to read, in 
part, as follows:

    Authority:  26 U.S.C. 7805.
* * * * *
    Section 301.6311-2 is also issued under 26 U.S.C. 6311.


0
Par. 2. Section 301.6311-2 is amended by:
0
1. Revising paragraph (d)(1).
0
2. Removing paragraph (e).
0
3. Redesignating paragraphs (f) through (h) as paragraphs (e) through 
(g).
0
4. Revising newly redesignated paragraph (e).
0
5. In newly redesignated paragraph (f), removing the language 
``Internal Revenue Service'' and adding the language ``IRS'' in its 
place.
0
6. Revising newly redesignated paragraph (g).
    The revisions read as follows:


Sec.  301.6311-2   Payment by credit card and debit card.

* * * * *

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    (d) Resolution of errors relating to the credit card or debit card 
account--(1) In general. Payments of taxes by credit card or debit 
card, and payments of reimbursement fees referred to in paragraph 
(e)(2) of this section, are subject to the applicable error resolution 
procedures of section 161 of the Truth in Lending Act (15 U.S.C. 1666), 
section 908 of the Electronic Fund Transfer Act (15 U.S.C. 1693f), or 
any similar provisions of State or local law, for the purpose of 
resolving errors relating to the credit card or debit card account, but 
not for the purpose of resolving any errors, disputes or adjustments 
relating to the underlying tax liability.
* * * * *
    (e) Authority to enter into contracts--(1) In general. The 
Commissioner may enter into contracts related to receiving payments of 
tax by credit card or debit card if such contracts are cost beneficial 
to the government. The determination of whether the contract is cost 
beneficial will be based on an analysis appropriate for the contract at 
issue and at a level of detail appropriate to the size of the 
government's investment or interest.
    (2) Contracts under which fees are prohibited. The Commissioner may 
enter into contracts that provide that the Internal Revenue Service 
(IRS) will not pay a fee, charge, or other monetary consideration under 
such contracts related to payments of tax by credit card or debit card. 
For payments of tax under such contracts, this section does not 
prohibit the imposition of fees or charges by issuers of credit cards 
or debit cards or by any other financial institutions or persons 
participating in the credit card or debit card transaction. The IRS may 
not receive any part of any such fees that may be charged.
    (3) Contracts under which fees are permitted and must be recouped. 
The Commissioner may enter into contracts that provide that the IRS 
will pay a fee, charge, or other monetary consideration under such 
contracts related to payments of tax by credit card or debit card. 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. 
The reimbursement fee is not a tax imposed by the Code, and no portion 
of the reimbursement fee is eligible for refund or credit under section 
6402 of the Code. The error resolution procedures described in 
paragraph (d)(1) of this section will apply to any errors concerning 
the reimbursement fee. In negotiating contracts under this paragraph 
(e)(3), the Commissioner will seek to minimize the amount of the fees 
paid.
* * * * *
    (g) Applicability date. The rules of this section apply to payments 
of taxes and reimbursement fees made on or after October 19, 2026.

Frank J. Bisignano,
Chief Executive Officer.
    Approved: September 10, 2026
Kevin M. Salinger,
Acting Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2026-21267 Filed 10-16-26; 8:45 am]
BILLING CODE 4831-GV-P


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