In an ongoing effort to adjust to the impacts of Coronavirus and COVID-19, the IRS has issued new guidance and timelines under the IRS People First Initiative.
Today, the IRS Issued IR-2020-58 in response to COVID-19. The guidance provides a more definitive framework of how the IRS will be working with those taxpayers who are either in the collections process, requesting relief through various means, or have payments pending under an offer in compromise or installment agreement. Below are the points I think are of most concern to our clients, including:
Payments for those under existing installment agreements are suspended between April 1 and July 15. However, please note that interest and penalties will still accrue so if you can continue to pay under your installment agreement you will end up paying less in the end.
Payments due under existing offers in compromise can be suspended until July 15, if the taxpayer wishes to do so. Again, penalties and interest will continue to accrue.
Existing offers in compromise will not be in default so long as the 2018 and 2019 return is filed by July 15.
The IRS encourages taxpayers to file their back returns and estimates that as many as 1 million taxpayers who have failed to file over the past 3 years is actually entitled to a refund. There is still time to get current with your taxes and you may actually be entitled to a refund. Please let us know if we can help you to file your back returns and see if a refund might be due.
Liens and levies (including any seizures of a personal residence) will be suspended during until July 15. The IRS did, however, mention that field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.
System generated liens and levies will be suspended until July 15.
The IRS will not be alerting the State Department about seriously delinquent accounts - therefore, passport revocations and suspensions will cease until July 15. Read our recent article on the topic of passport revocation here.
The IRS will not be using private debt companies to try to collect over this period.
During this period, the IRS will generally not start new field, office, and correspondence examinations (audits). However, the IRS did note that they may start new examinations (audits) when doing so is deemed necessary to protect the government's interest in preserving the applicable statute of limitations.
The IRS encourages taxpayers to respond to any IRS correspondence requesting additional information during this time if possible.
As always, and especially in trying times like this, we are here to help you resolve your tax issues with the government in the most beneficial way to you under the law. If we can help, please call us at 833-StopIRS or click here to schedule a phone consultation.