IRS Shows Taxpayers How Much They Care with Launch of New “People First” Initiative

Hey taxpayers! I hope this article finds you well and that you are all staying safe and healthy during this global crisis. I also hope this stay-at-home order is not driving everyone too crazy. If you are facing any IRS or tax issues, you should note that Ayar Law is still up and running, servicing those in need of our services. If you have any questions/concerns, I am just a phone call away 800.571.7175

This decade has not gotten off to the greatest start, to say the least. This coronavirus pandemic has infiltrated not only our immune systems, but also our economy, society, and our day-to-day lives. Every day brings something new – whether it be a substantial drop in the stock market or countless businesses being forced to shut down and furlough their employees (leaving millions of Americans without employment or a source of income). It seems like we are just sitting in our homes – under quarantine - and waiting with bated breath wondering “what next?”

Good news though – the Internal Revenue Service (IRS) has launched a new People First Initiative as of March 25, 2020.  This initiative sets out to provide taxpayers relief on several issues. From easing payment guidelines to postponing compliance actions - just to name a few - the IRS is taking steps to help mitigate the unprecedented hardships we are all experiencing as a result of this global crisis. 

The New initiative will begin April 1st and go through July 15th, 2020 (for now – end date may change).

IRS Commissioner Chuck Rettig had this to say about the new initiative:

“The IRS is taking extraordinary steps to help the people of our country. In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. During this difficult time, we want people working together, focused on their well-being.”

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

The IRS reminds people unable to fully pay their federal taxes that they can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. See IRS.gov for further information

Offers in Compromise (OIC)

The IRS is taking several steps to assist taxpayers in various stages of the OIC process:

Pending Offer in Compromise 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.

Offer in Compromise Payments

Taxpayers have the option of suspending all payments on accepted OIC's 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 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.

New Offer in Compromise Applications

The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed o resolve outstanding tax liabilities by providing a “Fresh Start.” Further information is available at IRS.gov

Non-Filers

The IRS reminds people who have not filed their return for tax years before 2019 that they should file their delinquent returns. More than 1 million households that haven’t filed tax returns during the last three years are actually owed refunds; they still have time to claim these refunds. Many should consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute. Once delinquent returns have been filed, taxpayers 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.” See IRS.gov for further information.

Field Collection Activities

Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

Automated Liens and Levies

New automatic, systemic liens and levies will be suspended during this period.

Passport Certifications to the State Department

IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during this period. These taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period. Certification prevents taxpayers from receiving or renewing passports.

Private Debt Collection

New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Field, Office and Correspondence Audits

During this period, the IRS will generally not start new field, office and correspondence examinations. They will continue to work refund claims where possible, without in-person contact. However, the IRS may start new examinations 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. To facilitate the progress of open examinations, 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 are able to do so.

Unique Situations

Particularly for some corporate and business taxpayers, the IRS understands that there may be instances where the taxpayers desire to begin an examination while people and records are available and respective staffs have capacity. In those instances when it’s in the best interest of both parties and appropriate personnel are available, the IRS may initiate activities to move forward with an examination – understanding that COVID-19 developments could later reduce activities for an agreed period.

General Requests for Information

In addition to compliance activities and examinations, the IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this time if possible.

Earned Income Tax Credit and Wage Verification

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. These taxpayers are encouraged to exercise their best efforts to obtain and submit all requested information, and if they are unable to do so, should reach out to the IRS indicating the reason such information is not available. Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information.

IRS Appeals Office

Appeals employees will continue to work their cases. Although Appeals is not currently holding in-person conferences with taxpayers, conferences may be held over the telephone or by videoconference. Taxpayers are encouraged to promptly respond to any outstanding requests for information for all cases in the Independent Office of Appeals.

IRS Statute of Limitations

The IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period, taxpayers are encouraged to cooperate in extending such statutes. Otherwise, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.

Contact an Attorney

If you have any tax questions or issues, I am just a phone call away and I am still operating during this quarantine.  Please do not hesitate to call me at 800.571.77175.