“One thing is clear: The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.”
– Ron Paul
If you’ve read some of our prior blog posts you already know our policy to interactions with the IRS comes down to a simple Reganesque axiom.
WE RESPECT BUT WE DO NOT TRUST
What does that mean? It comes down to some fairly simple principles;
- Co-operation and honesty in all dealings with the IRS,
- but only to the extent required by law or regulation,
- and no acceptance of fishing expeditions by auditors.
As long as we stick to these principles we’ve found the IRS are perfectly happy working with us and we achieve the best outcomes for our clients.
(If you want us to work on your behalf with the IRS just click here to schedule a free 30 minute consultation with one of our Enrolled Agents.)
That being said the IRS does sometime genuinely surprise us as it did on May 13, 2021 were due to COVID-19, the IRS announced its “People First Initiative” providing relief to taxpayers already in trouble on a variety of issues from easing payment guidelines to delaying compliance actions. This relief is effective through the filing and payment deadline, Wednesday, July 15, 2020.
SUMMARY OF THE BENEFITS IN “PEOPLE FIRST”
You can find more information in IRS Tax Tip 2020-56 (published May 13, 2020), but here’s a summary on how this might impact problem taxpayers:
Existing Installment Agreements
Under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are delayed. Those currently unable to meet the terms of an Installment Payment Agreement or Direct Deposit Installment Agreement may cancel payments during this period with no default. By law, interest will continue to accumulate on any unpaid balances.
New Installment Agreements
People who can’t pay all their federal taxes can establish a monthly payment agreement.
Pending Offer in Compromise applications – Taxpayers have until July 15, 2020, to provide additional information for a pending OIC. The agency generally won’t close any pending OIC request before July 15 without the taxpayer’s consent.
OIC payments
Taxpayers can delay all payments on accepted OICs until July 15, 2020. Interest may accrue, and missed payments are due when the suspension period ends. Taxpayers can call the number on their acceptance letter to address their needs.
Delinquent Return Filings
The IRS will not default an OIC for taxpayers who are delinquent in filing their tax return for 2018. However, they should file any delinquent 2018 return and their 2019 return by July 15, 2020.
Non-filers
More than 1 million households who haven’t filed tax returns in the last three years are owed refunds. The deadline to get refunds on 2016 tax returns is July 15, 2020. Those who owe taxes on delinquent returns may visit IRS.gov for payment options. The longer the debt is owed, the more penalties and interest accrue.
Field Collection Activities
IRS stopped field revenue officer enforcement actions, such as liens and levies. Revenue officers will continue to pursue high-income non-filers and perform other similar activities where necessary.
Automated Liens And Levies
IRS delayed issuing new automated and systemic liens and levies. Taxpayers experiencing a hardship due to a levy should reach out to their assigned IRS contact or fax their information to 855-796-4524.
Certifications to the State Department
IRS has delayed new certifications of taxpayers who are considered seriously delinquent. This affects a person’s ability to receive a new or renewed passport. Existing certifications will remain in place unless their tax situation changes.
Private debt collection – IRS will not forward new delinquent accounts to private collection agencies during this period.
To learn more about the changes and what you need to do when the extended time on these runs out schedule a FREE 30 minute call with us by using the form below.
