The IRS has announced sweeping new measures to facilitate tax compliance during the virus crisis. Commissioner Chuck Rettig announced the IRS People First initiative to bring immediate relief to those facing fiscal uncertainty during the health crisis. Highlights of key actions 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 payment agreement, may withhold payments during this period if they prefer. Additionally, the IRS will not default on any installment agreement during this period. By law, interest will continue to accrue on any outstanding balance.
New installment agreements – The IRS reminds people unable to pay their federal taxes in full that they can settle unpaid debts by entering into a monthly payment agreement with the IRS. See IRS.gov for more information.
Offers in Compromise (OIC) – The IRS takes several steps to assist taxpayers at various stages of the OIC process:
OIC requests pending – The IRS will allow taxpayers until July 15 to provide additional information requested to support a pending OIC. In addition, the IRS will not close any pending OIC applications before July 15, 2020, without the consent of the taxpayer.
OIC Payments – Taxpayers have the option to suspend all payments on accepted ICOs until July 15, 2020, although by law interest will continue to accrue on any outstanding balance.
Overdue return deposits – The IRS will not default an OCI for taxpayers who are late in filing their tax return for the 2018 tax year. However, taxpayers must file any late 2018 returns (and their 2019 declaration) no later than July 15, 2020.
New OIC Applications – The IRS reminds people facing liabilities exceeding their net worth that the OIC process is designed to resolve unpaid tax debts by offering a “fresh start.” More information is available at IRS.gov
Non-declarants – The IRS reminds people who did not file their return for tax years before 2019 to file their overdue returns. Over a million households that have not filed an income tax return in the past three years are actually due to repayments; they still have time to claim these refunds. Many should consider contacting a tax professional to review the various options available, as the time frame for receiving such refunds is limited by law. Once overdue returns have been filed, taxpayers subject to tax should consider taking the opportunity to resolve any outstanding liabilities by entering into an installment agreement or offer in compromise with the IRS to secure a ” new start “. See IRS.gov for more information.
Field collection activities – The privileges and withdrawals (including any seizure of a personal residence) initiated by the field revenue officers will be suspended during this period. However, field revenue officers will continue to prosecute high income non-filers and perform other similar activities when warranted.
Privileges and automated debits – New privileges and automatic and systemic debits will be suspended during this period.
State passport certificates department – The IRS will suspend new certifications to the State Department for “seriously delinquent” taxpayers during this period. These taxpayers are encouraged to submit a request for a disbursement agreement or, where applicable, a decree during this period. Certification prevents taxpayers from receiving or renewing passports.
Collection of private debts – New overdue 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 begin new field, office and correspondence exams. We will continue to process refund requests to the extent possible, without in-person contact. However, the IRS may begin new reviews when it deems it necessary to protect the government’s interest in preserving the applicable statute of limitations.
Meetings in person – In-person meetings regarding ongoing field, office and correspondence reviews will be suspended. While IRS examiners will not be holding in-person meetings, they will continue their exams remotely, if possible. To facilitate the conduct of open reviews, taxpayers are encouraged to respond to any request for information they have already received – or may receive – on any review activity during this period if they are able to. do it.
Unique situations – Particularly for some corporate and corporate taxpayers, the IRS understands that there may be instances where taxpayers wish to begin a review when the people and records are available and the respective staff has the capacity. In cases where it is in the best interests of both parties and the appropriate personnel are available, the IRS may initiate activities to move forward with a review – with the understanding that COVID-19 developments may later reduce activities for an agreed period.
General inquiries – In addition to activities and compliance reviews, the IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this period if possible.
Earned Income Tax Credit and Salary Verification Reviews – Taxpayers have until July 15, 2020 to respond to the IRS to verify they are eligible for the earned income tax credit or to verify their income. These taxpayers are encouraged to do their best to obtain and submit all the information requested, and if they are unable to do so, please contact the IRS stating the reason why this information is not available. Until July 15, 2020, the IRS will not deny these credits for failure to provide the requested information.
IRS Appeals Office – Appeals employees will continue to work on their files. Although Appeals does not currently hold face-to-face conferences with taxpayers, conferences can take place by telephone or video conference. Taxpayers are encouraged to respond promptly to any outstanding information requests for all cases to the Independent Appeals Office.
IRS statute of limitations – The IRS will continue to take action as necessary to protect any applicable limitation periods. In cases where the expiration of laws could be compromised during this period, taxpayers are encouraged to cooperate to extend these laws. Otherwise, the IRS will issue notices of deficiency and pursue other similar actions to protect the interests of the government by preserving these laws. When a legal deadline does not expire in 2020, the IRS is unlikely to pursue the aforementioned actions until at least July 15, 2020.