To help people facing the challenges of COVID-19 issues, the Internal Revenue Service recently announced a new program to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions. This new program, called the “IRS People First Initiative”, is meant to help people facing uncertainty over taxes.
Highlights of the features of the IRS People First Initiative include:
- Existing Installment Agreements. For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.
- New Installment Agreements. People unable to fully pay their federal taxes can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS.
- Offers in Compromise (OIC). The IRS is taking several steps to assist taxpayers in various stages of the OIC process:
- Pending OIC Applications. The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.
- OIC Payments. Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.
- Delinquent Return Filings. The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
- Leins and Levies. Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. Additionally, new automatic, systemic liens and levies will be suspended during this period.
- Field, Office and Correspondence Audits. During this period, the IRS will generally not start new field, office and correspondence examinations.
- Earned Income Tax Credit and Wage Verification Reviews. Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income. Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information.
This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.