The Commissioner of the Internal Revenue Service has announced additional measures designed to help struggling taxpayers manage the economic impact of the COVID-19 crisis. If you owe back taxes to the IRS, but are worried about how you are going to pay for your family’s basic necessities, let alone past due taxes, then the IRS’s People First Initiative (IR-2020-59) is welcome news.
“IRS employees care about our people and our country, and they have a strong desire to help improve this situation,” said Commissioner Chuck Rettig. “These new actions reflect just one of many ways our employees are working hard every day to assist the nation. We care, a lot. IRS employees are actively engaged, and they have always delivered for their communities and our country. The People First Initiative is designed to help people take care of themselves and is a key part of our ongoing response to the coronavirus effort.”
If you are dealing with an IRS tax problem, here is how the Service’s People First Initiative impacts you:
Installment Payment Agreements (IPA)
If you are paying the IRS under an existing Installment Payment Agreement, the IRS has suspended your obligation to make installment payments that are due between April 1st and July 15th. The suspension could be further suspended if deemed necessary. By law, interest will continue to accrue on the unpaid balance, but the IRS will not default your agreement if you fail to make a payment that is due during the suspension. If you are making your payments through a Direct Debit Installment Method you should contact the Service at the number provided to you in correspondence (or you can call 1-800-829-1040) and indicate your desire to suspend your installment payments. I would anticipate long hold times, so be prepared.
If you have a pending offer and have been asked to provide additional information, the IRS has extended your deadline to comply until July 15, 2020. If your offer was accepted and you are required to make monthly payments to satisfy your offer, you have the option to suspend your payments that are due from April 1st through July 15th.
Automated Lien and Levies
If you have not yet addressed your tax debt with the IRS and live under the constant worry that the IRS will levy your bank account or garnish your paycheck, the People First Initiative will provide you some temporary peace of mind. The Service has now suspended automatic liens and levies from April 1st through July 15th. If you are dealing with a Revenue Officer on your case the suspension still applies, but be aware that the Service will still pursue collection against high income non-filers and take other actions “where warranted.”
If you are dealing with an unresolved tax debt and have been furloughed from your job or you are worried that your small business may not be able to return from the COVID-19 crisis, then I encourage you to explore a permanent solution to your tax problem with a tax professional. The IRS will not forgo enforced collection forever and there may never be a better time to pursue an Offer-In-Compromise. The Service’s People First Initiative reminds us that the IRS is still accepting offers from qualified taxpayers that deserve a “Fresh Start.” You owe it to yourself to see if you qualify. The initial consultation is free and it might just lead to a solution that will take this weight from your shoulders so that you can focus on returning to work.