IRS Counsel opines credit card fees are personal, nondeduuctible expenses

[Barney Byrd]

SECTION 212 -- EXPENSES FOR PRODUCTION OF INCOME

No deduction is allowed under I.R.C. § 212(3) for fee
charged by credit card company for using credit card to pay
individual's personal income taxes due but rather fee should
be considered as a nondedeductible personal expense under
I.R.C. § 262 (S.C.A. 200115032).

Internal Revenue Code § 6311(d)(2) provides that the
secretary may not pay any fee or provide any other
consideration under any contract for the use of credit,
debit, or charge cards for the payment of income taxes.

The regulations provide that internal revenue taxes may be
paid by credit card or debit card as authorized. The
regulations also provide that the government may not impose
any fee or charge on persons making payment of taxes by
credit card or debit card. This does not prohibit the
imposition of charges by issuers of credit cards or debit
cards or by any other financial institution or person
participating in the credit card or debit card transaction.

The issue is whether an individual may deduct a fee charged
by a credit card company for using a credit card to pay the
individual's personal income taxes due.

The national office concluded that no deduction is allowed
under I.R.C. § 212(3) for a fee charged by a credit card
company for using a credit card to pay the individual's
personal income taxes due; rather, the fee should be
considered as a nondedeductible personal expense under
I.R.C. § 262.

====================

Barney Byrd
barne...@msn.com

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[DORFMONT]

Yeah, and you can't deduct the cost of certified mail or the
trip to the Post Office either.

Linda Dorfmont EA

[Helen P. OPlanick EA]

> Yeah, and you can't deduct the cost of certified mail or the
> trip to the Post Office either.

I don't have a bit of a problem allowing the postage to
be a part of the tax prep fee on Sch A.

Helen, EA in PA
Member of NAEA, NATP and the Tax Gang
Member of Electronic Tax Admin. Advisory Committee (ETAAC)
Director, NAEA

[Frederick E. Jorden]

DORFMONT wrote:

> Yeah, and you can't deduct the cost of certified mail or the
> trip to the Post Office either.

No, if you can get beyond the 2% limit, those are as
deductible as tax return preparation fees.

> Linda Dorfmont EA

--
Frederick E. Jorden http://fejcpapc.com/
Frederick E. Jorden, CPA PC
10049 Midlothian Tpk - 2-H Richmond, VA 23235 EMAIL fej...@erols.com
(804) 320-6210 FAX (804) 320-6211

[D. Stussy]

DORFMONT wrote:

> Yeah, and you can't deduct the cost of certified mail or the
> trip to the Post Office either.

Why doesn't IRC 212, paragraph 3, which allows expenses
incident to the "determination, assessment, or collection of
any tax" apply to delivery costs of the self-assessment (the
taxpayer's return)? A fee paid to another for tax
preparation does. Fees and costs for audits, appeals, and
Tax Court do (however, for purposes of the Court's
equivalent to U.S. District Court's FCivP 54, only costs
starting with the petition fee are awardable).

[Bruce D. Steiner]

DORFMONT wrote:

> Yeah, and you can't deduct the cost of certified mail or the
> trip to the Post Office either.

Even if you're over the 2% floor?

Bruce Steiner

[Tambien99]

If over the 2% limit, you can deduct the postage and the
trip to the post office as well as any other tax prep fee.
There's case law on this, believe it or not.