March 26, 2020
Anton L. Janik
Coronavirus (COVID-19), Tax
Internal Revenue Service (IRS) Commissioner Chuck Rettig has announced the People First Initiative to provide immediate relief to taxpayers, noting that "We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country." The changes focus on the collection side, with particular focus on Installment Agreements, Offers in Compromise, collection attempts, audits, verification reviews and appeals.
Here’s what you need to know:
Installment Agreements. If you have a client on an Installment Agreement, payments otherwise due between April 1 and July 15, 2020 are suspended. The IRS will not default any Installment Agreement during this period, but note that interest will continue to accrue on balances. You may still file for an Installment Agreement during this time period.
Offers in Compromise (OIC). If your clients have pending applications, you have until July 15, 2020 to provide additional requested information in support. The IRS will not close any pending OIC prior to July 15, 2020 without taxpayer consent. Taxpayers may suspend payments on any accepted OIC until July 15, 2020. Interest will continue to accrue. If your client is delinquent in their 2018 tax year filings, the IRS will not default their OIC provided they file their delinquent 2018 return and their 2019 return by July 15, 2020.
Field Collection Activities. Liens and levies initiated by field officers, including seizures of personal residences, will be suspended until July 15, 2020. However, high-income non-filers will still be pursued during this time. Automated liens and levies will be suspended until July 15, 2020. Passport Certifications to the State Department are on hold during this timeframe, so if you have a client that crosses the minimum balances to trigger this certification, this would be an excellent time to submit an Installment Agreement.
Audits. Between now and July 15, 2020, the IRS will not start new examinations, unless they are deemed necessary to protect the government’s interest due to an impending statute of limitation. The IRS will continue to work refund claims where possible. Where a taxpayer requests—and where it is in the best interest of both parties—the IRS will continue with an examination during this time period.
Verification Reviews. Taxpayers have until July 15, 2020 to respond to IRS requests for verification of their qualification for the Earned Income Credit or to verify their income. The IRS will not deny their credits for a failure to provide requested information before that date.
Appeals. Appeals continues to work up its cases, but will not hold in-person conferences, only telephone conferences.
The IRS notes that it “will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” so adjustments to this Initiative may come as we move forward.
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