[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6311-2]

[Page 208-211]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Collection
 
Sec. 301.6311-2  Payment by credit card and debit card.

    (a) Authority to receive--(1) Payments by credit card and debit 
card. Internal revenue taxes may be paid by credit card or debit card as 
authorized by this section. Payment of taxes by credit card or debit 
card is voluntary on the

[[Page 209]]

part of the taxpayer. Only credit cards or debit cards approved by the 
Commissioner may be used for this purpose, only the types of tax 
liabilities specified by the Commissioner may be paid by credit card or 
debit card, and all such payments must be made in the manner and in 
accordance with the forms, instructions and procedures prescribed by the 
Commissioner. All references in this section to tax also include 
interest, penalties, additional amounts, and additions to tax.
    (2) Payments by electronic funds transfer other than payments by 
credit card and debit card. Provisions relating to payments by 
electronic funds transfer other than payments by credit card and debit 
card are contained in section 6302 and the Treasury Regulations 
promulgated pursuant to section 6302.
    (3) Definitions--(i) Credit card means any credit card as defined in 
section 103(k) of the Truth in Lending Act (15 U.S.C. 1602(k)), 
including any credit card, charge card, or other credit device issued 
for the purpose of obtaining money, property, labor, or services on 
credit.
    (ii) Debit card means any accepted card or other means of access as 
defined in section 903(1) of the Electronic Fund Transfer Act (15 U.S.C. 
1693a(1)), including any debit card or similar device or means of access 
to an account issued for the purpose of initiating electronic fund 
transfers to obtain money, property, labor, or services.
    (b) When payment is deemed made. A payment of tax by credit card or 
debit card shall be deemed made when the issuer of the credit card or 
debit card properly authorizes the transaction, provided that the 
payment is actually received by the United States in the ordinary course 
of business and is not returned pursuant to paragraph (d)(3) of this 
section.
    (c) Payment not made--(1) Continuing liability of taxpayer. A 
taxpayer who tenders payment of taxes by credit card or debit card is 
not relieved of liability for such taxes until the payment is actually 
received by the United States and is not required to be returned 
pursuant to paragraph (d)(3) of this section. This continuing liability 
of the taxpayer is in addition to, and not in lieu of, any liability of 
the issuer of the credit card or debit card or financial institution 
pursuant to paragraph (c)(2) of this section.
    (2) Liability of financial institutions. If a taxpayer has tendered 
a payment of internal revenue taxes by credit card or debit card, the 
credit card or debit card transaction has been guaranteed expressly by a 
financial institution, and the United States is not duly paid, then the 
United States shall have a lien for the guaranteed amount of the 
transaction upon all the assets of the institution making such 
guarantee. The unpaid amount shall be paid out of such assets in 
preference to any other claims whatsoever against such guaranteeing 
institution, except the necessary costs and expenses of administration 
and the reimbursement of the United States for the amount expended in 
the redemption of the circulating notes of such institution.
    (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 
shall be 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.
    (2) Matters covered by error resolution procedures. (i) The error 
resolution procedures of paragraph (d)(1) of this section apply to the 
following types of errors--
    (A) An incorrect amount posted to the taxpayer's account as a result 
of a computational error, numerical transposition, or similar mistake;
    (B) An amount posted to the wrong taxpayer's account;
    (C) A transaction posted to the taxpayer's account without the 
taxpayer's authorization; and
    (D) Other similar types of errors that would be subject to 
resolution under 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 similar provisions of state or local law.

[[Page 210]]

    (ii) An error described in paragraph (d)(2)(i) of this section may 
be resolved only through the procedures referred to in paragraph (d)(1) 
of this section and cannot be a basis for any claim or defense in any 
administrative or court proceeding involving the Commissioner or the 
United States.
    (3) Return of funds pursuant to error resolution procedures. 
Notwithstanding section 6402, if a taxpayer is entitled to a return of 
funds pursuant to the error resolution procedures of paragraph (d)(1) of 
this section, the Commissioner may, in the Commissioner's sole 
discretion, effect such return by arranging for a credit to the 
taxpayer's account with the issuer of the credit card or debit card or 
any other financial institution or person that participated in the 
transaction in which the error occurred.
    (4) Matters not subject to error resolution procedures. The error 
resolution procedures of paragraph (d)(1) of this section do not apply 
to any error, question, or dispute concerning the amount of tax owed by 
any person for any year. For example, these error resolution procedures 
do not apply to determine a taxpayer's entitlement to a refund of tax 
for any year for any reason, nor may they be used to pay a refund. All 
such matters shall be resolved through administrative and judicial 
procedures established pursuant to the Internal Revenue Code and the 
rules and regulations thereunder.
    (5) Section 170 of the Truth in Lending Act not applicable. Payments 
of taxes by credit card or debit card are not subject to section 170 of 
the Truth in Lending Act (15 U.S.C. 1666i) or to any similar provision 
of state or local law.
    (e) Fees or charges. The Internal Revenue Service may not impose any 
fee or charge on persons making payment of taxes by credit card or debit 
card. This section does not prohibit the imposition of fees or 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 Internal Revenue Service may not receive any part of 
any fees that may be charged.
    (f) Authority to enter into contracts. 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 shall 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. The Commissioner may not pay any fee or charge or provide any 
other monetary consideration under such contracts for such payments.
    (g) Use and disclosure of information relating to payment of taxes 
by credit card and debit card. Any information or data obtained directly 
or indirectly by any person other than the taxpayer in connection with 
payment of taxes by a credit card or debit card shall be treated as 
confidential, whether such information is received from the Internal 
Revenue Service or from any other person (including the taxpayer).
    (1) No person other than the taxpayer shall use or disclose such 
information except as follows--
    (i) Card issuers, financial institutions, or other persons 
participating in the credit card or debit card transaction may use or 
disclose such information for the purpose and in direct furtherance of 
servicing cardholder accounts, including the resolution of errors in 
accordance with paragraph (d) of this section. This authority includes 
the following--
    (A) Processing the credit card or debit card transaction, in all of 
its stages through and including the crediting of the amount charged on 
account of tax to the United States Treasury;
    (B) Billing the taxpayer for the amount charged or debited with 
respect to payment of the tax liability;
    (C) Collecting the amount charged or debited with respect to payment 
of the tax liability;
    (D) Returning funds to the taxpayer in accordance with paragraph 
(d)(3) of this section;
    (E) Sending receipts or confirmation of a transaction to the 
taxpayer, including secured electronic transmissions and facsimiles; and
    (F) Providing information necessary to make a payment to state or 
local government agencies, as explicitly authorized by the taxpayer 
(e.g., name,

[[Page 211]]

address, taxpayer identification number).

    (ii) Card issuers, financial institutions or other persons 
participating in the credit card or debit card transaction may use and 
disclose such information for the purpose and in direct furtherance of 
any of the following activities--

    (A) Assessment of statistical risk and profitability;

    (B) Transfer of receivables or accounts or any interest therein;

    (C) Audit of account information;

    (D) Compliance with federal, state, or local law; and

    (E) Cooperation in properly authorized civil, criminal, or 
regulatory investigations by federal, state, or local authorities.

    (2) Notwithstanding the provisions of paragraph (g)(1) of this 
section, use or disclosure of information relating to credit card and 
debit card transactions for purposes related to any of the following is 
not authorized--

    (i) Sale of such information (or transfer of such information for 
consideration) separate from a sale of the underlying account or 
receivable (or transfer of the underlying account or receivable for 
consideration);

    (ii) Marketing for any purpose, such as, marketing tax-related 
products or services, or marketing any product or service that targets 
those who have used a credit card or debit card to pay taxes; and

    (iii) Furnishing such information to any credit reporting agency or 
credit bureau, except with respect to the aggregate amount of a 
cardholder's account, with the amount attributable to payment of taxes 
not separately identified.

    (3) Use and disclosure of information other than as authorized by 
this paragraph (g) may result in civil liability under sections 
7431(a)(2) and (h).

    (h) Effective date. This section applies to payments of taxes made 
on and after December 14, 2001.


[T.D. 8969, 66 FR 64743, Dec. 14, 2001; 67 FR 1416, Jan. 11, 2001]