IRS Takes More Steps to Ease Taxpayers’ Outstanding Tax Burdens by Cherry Laufenberg, CPA
Following on the heels of the 2019 federal income tax filing extension, the IRS is instituting additional programs to help individuals and businesses meet their previously unpaid tax liabilities while struggling with the economic realities of the COVID-19 pandemic. The agency has already closed many offices, including Taxpayer Assistance Centers, and reduced its operations to focus on “mission-critical items.”
The centerpiece of the IRS’s taxpayer-relief program is the People First Initiative, which includes the following provisions.
Installment Agreements
Payments of back taxes due between April 1 and July 15 under an existing installment agreement are suspended. While the IRS will not default any installment agreements, by law, interest will continue to accrue on any unpaid balances.
Offers in Compromise (OIC)
Taxpayers with pending applications for OICs have until July 15 to provide requested information to the IRS and avoid closing any pending OIC requests. Taxpayers who have an accepted OIC may suspend all payments until July 15, but they should note that interest will continue to accrue on unpaid balances. Additionally, the IRS will not default an OIC for taxpayers who are delinquent in filing their tax return for tax year 2018. However, it is recommended that taxpayers file delinquent 2018 tax returns and their 2019 returns on or before July 15, 2020.
Field Collection Activities and Automated Liens and Levies
IRS field officers will suspend previously initiated liens and levies for most taxpayers through July 15, but they will continue to pursue those activities involving high-income non-filers and perform other, similar activities where warranted. All new automatic, systemic liens and levies will be suspended during this time.
Passport Certifications to the State Department
The IRS will suspend its efforts to prevent delinquent taxpayers from renewing passports or receiving new passports through July 15.
Private Debt Collection
The IRS will not forward new tax delinquency to private collection agencies.
Field, Office and Correspondence Audits and Appeals
The IRS has suspended all face-to-face meetings regarding current examinations, refund claims and appeals, but it will continue to pursue those activities remotely via telephone or video conference. Taxpayers should respond promptly to all past and future information requests from the IRS. While the IRS does not expect to commence new field, office and correspondence examinations at this time, it does reserve the right to protect the government’s interest and pursue actions when deemed necessary.
About the Author: Cherry Laufenberg, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant, where she works with corporations, pass-through entities, trusts and foreign entities. She can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com.
Information contained in this article is subject to change based on further interpretation of tax laws and subsequent guidance issued by the Internal Revenue Service.
← Previous
