The IRS recently announced The People First Initiative to provide compliance relief to taxpayers experiencing COVID-19 related hardships.
It released a FAQ to address how taxpayers undergoing audits or have collections and other issues can proceed.
Here’s how it impacts you.
If you owe back taxes
IRS is not forgiving tax debts and balances will continue to accrue penalties and interest during the relief period.
But the IRS is easing payment guidelines. Specifically, the IRS is:
- allowing taxpayers to suspend their payments on Installment Agreements if they are unable to comply.
- halting the majority of new liens and levies initiated by field revenue officers, including any seizures of a personal residence.
- Stopping the issuance of new automatic, systemic liens and levies.
- suspending Passport Certifications to the State Department that prevent “seriously delinquent” taxpayers from receiving or renewing passports.
- not forwarding new delinquent accounts to private collection agencies.
Offer in compromise
The IRS will allow taxpayers until July 15, 2020, to provide any additional information the IRS requested to support a pending OIC.
Taxpayers who are required to make payments can defer them to July 15, 2020 if they are unable to make them timely.
Taxpayers with existing installment agreements may defer payments due between April 1 and July 15, 2020.
Taxpayers who have direct deposit installment agreements and wish to suspend payments should contact their bank directly to suspend the payments.
Earned income credit reviews
Taxpayers who have received income verification notices due to claiming the earned income credit have until July 15, 2020 to submit the requested information.
If you have unfiled tax returns
The IRS will continue its work to secure unfiled tax returns during the suspension period.
The IRS will not generally default an Offer in Compromise 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.
If you are under audit
The IRS suspended face-to-face meetings related to current field, office and correspondence examinations.
However, it is expanding its secure electronic communications to support taxpayers and may reach out by email or phone in addition to mail to work current cases.
The IRS will generally not start new field, office, and correspondence examinations until July 15, 2020.
The IRS Office of Appeals remains open and is continuing to hold conferences over the telephone and by videoconference.
Source: IR-2020-59, March 25, 2020