Relief for taxpayers facing the challenges of COVID-19-related tax issues is now available through the IRS People First initiative. The projected start date will be April 1 and the effort will initially run through July 15, 2020. During this period, to the maximum extent possible, in-person contact will be avoided; however, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
Some of the highlights affecting taxpayers include:
Installment Agreements
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, during this period, Installment Agreements will not be defaulted on. By law, interest will continue to accrue on any unpaid balances.
New Installment Agreements. Taxpayers unable to fully pay their federal taxes can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. Please contact the office if you need assistance with this.
Offers in Compromise (OIC)
Several steps are available to assist taxpayers in various stages of the OIC process:
Non-Filers
If you have not filed a return for tax years before 2019, it is in your best interest to file any delinquent returns as you may be owed a refund. More than 1 million households that haven’t filed tax returns during the last three years are actually owed refunds and there is still time to claim these refunds. Once delinquent returns have been filed, anyone with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.” Please call if you need help filing delinquent tax returns.
Field, Office and Correspondence Audits
During this period, generally, no new field, office and correspondence examinations will be started and the IRS will continue to work refunding claims where possible. New examinations may be started, however, where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
In-Person Meetings. In-person meetings regarding current field, office, and correspondence examinations will be suspended. Even though IRS examiners will not hold in-person meetings, they will continue their examinations remotely, where possible. Taxpayers are encouraged to respond to any requests for information they already have received – or may receive – on all examination activity during this period if they can do so.
Unique Situations. There may be instances – particularly for some corporate and business taxpayers – where the taxpayers desire to begin an examination while people and records are available and respective staff are available.
General Requests for Information. In addition to compliance activities and examinations, taxpayers are encouraged to respond to any other IRS correspondence requesting additional information during this time if possible.
Help is Just a Phone Call Away
Specific information about the implementation of these provisions is forthcoming; however, if you have any questions or if any of these situations affect you, please call.
Any accounting, business or tax advice contained in this article, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.