IRS’ People First Initiative and measures taken as a result of COVID-19 crisis
The Internal Revenue Service (“IRS”) is currently working on different measures and new legislation in order to assist taxpayers by providing relief on a variety of issues that have risen due to COVID-19. As a result, it created the People First Initiative in order to provide immediate relief.
Key actions taken by the IRS as part of this initiative include:
- Existing Installment Agreements
- Payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement may suspend payments during this period if they prefer.
- IRS will not default any Installment Agreements during this period.
- IMPORTANT: Interest will continue to accrue on any unpaid balances.
- New Installment Agreements
- Individuals unable to fully pay their federal taxes can address outstanding liabilities by entering into a monthly payment agreement with the IRS.
- Offers in Compromise (“OIC”)
- Pending OIC applications: IRS will give taxpayers until July 15 to provide requested additional information. IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.
- OIC Payments: Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020. Interest will continue to accrue on any unpaid balances.
- Delinquent Return Filings: IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
- New OIC Applications: IRS encourages taxpayers to seek information on OIC process which is designed to resolve outstanding tax liabilities by providing a “Fresh Start”.
- Individuals who have not filed their return for tax years before 2019 should file their delinquent returns. Once delinquent returns have been filed, taxpayers with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an OIC with the IRS.
- Field Collection Activities
- Liens and levies initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.
- Automated Liens and Levies
- Suspended during this period.
- Passport Certifications to the State Department
- Certifications for preventing seriously delinquent taxpayers from receiving or renewing passports are suspended. Taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period.
- Private Debt Collection
- New delinquent accounts will not be forwarded by the IRS to private collection agencies during this period.
- Field, Office and Correspondence Audits
- IRS will generally not start new field, office and correspondence examinations. In-Person meetings suspended. IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
- Earned Income Tax Credit and Wage Verification Reviews
- Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income. Until said date, the IRS will not deny these credits for a failure to provide requested information.
- Independent Office of Appeals
- Appeals employees will continue to work their cases, thus taxpayers are encouraged to promptly respond to any outstanding request for information. Not currently holding in-person conferences with taxpayers, but conferences may be held over the telephone or by videoconference.
- Statute of Limitations
- IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
- Practitioner Priority Service
- There may be more significant wait times for the PPS. The IRS will continue to monitor this as situations develop.
The IRS will be temporarily modifying activities as soon as possible with a projected start date of April 1, 2020. As the IRS provides more detail information about the implementation of this initiative and others, we will continue to update our clients on these matters.