The Internal Revenue Service’s (IRS) new initiative, “People First,” includes new measures in dealing with the fallout of the coronavirus public health emergency. Here are the latest updates on how the IRS is giving taxpayers some breathing room.
Installment Agreements: Payments due on existing installment agreements are suspended from April 1 to July 15, 2020. But, interest will continue to accrue on the balance. People who cannot pay their balance can access new installment agreements from the IRS’s website.
Offers in Compromise (OICs): An offer in compromise (OIC) is an agreement between a taxpayer and the IRS that settles a taxpayer’s tax liabilities for less than the full amount owed. The IRS is extending a number of deadlines related to OICs. Taxpayers have until July 15 to provide additional information to support a pending OIC, and the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent. As for OIC payments, taxpayers can suspend all payments on accepted OICs until July 15, 2020, although interest will accrue on unpaid balances. The IRS also will not default an OIC for taxpayers who are delinquent in filing their tax return for the tax year 2018. Taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
Field Collection Activities: The IRS will suspend any liens and levies (including personal residence seizures) initiated by field revenue officers during this period. Field revenue officers will continue to pursue high-income non-filers and may perform other similar activities.
Passport Certifications to the State Department: The IRS will suspend new passport notifications for “seriously delinquent” taxpayers during this period.
Private Debt Collection: The IRS will not forward new delinquent accounts to private debt collectors until further notice.
Field, Office, and Correspondence Audits: New field, office, and correspondence audits will generally not be started during this period except to preserve cases where the statute of limitations is about to expire. In-person meetings are being suspended, but remote examinations may continue.
Earned Income Tax Credit (EITC): Wage verification reviews and other requests for information from taxpayers who are claiming the EITC will be postponed until July 15.
Appeals: Appeals will be processed without in-person meetings, using teleconferencing instead.
In summary, the People First Initiative means that the IRS generally will not start new field, office or correspondence examinations at this time. They will work to refund claims without in-person contact where possible. Existing installment agreements with the IRS with payments due between April 1, and July 15, 2020, are suspended. But, interest will accrue.
Please give me a call or speak with your tax professional if you have any questions about these new regulations.