To help people facing the challenges of COVID-19 issues, the Internal Revenue Service (“IRS”) announced on March 25 a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.
The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes. Relief under the IRS People First Initiative includes the temporary modification of activities ranging from the postponement of certain payments related to Installment Agreements and Offers in Compromise to limiting certain collection and enforcement actions. The projected start date of the Initiative will be April 1 and the effort will initially run through July 15. During this period, to the maximum extent possible, the IRS will also avoid in-person contacts. However, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
Highlights of the key actions in the IRS People First Initiative include:
Existing Installment Agreements – For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.
Offers in Compromise (“OIC”) – The IRS is taking several steps to assist taxpayers in various stages of the OIC process:
- Pending OIC applications – The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the 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, although by law interest will continue to accrue on any unpaid balances.
- Delinquent Return Filings – The 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.
Field Collection Activities – Liens and levies (including any seizures of a personal residence) 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 – New automatic, systemic liens and levies will be suspended during this period.
Passport Certifications to the State Department – IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during this period. Certification prevents taxpayers from receiving or renewing passports.
Field, Office and Correspondence Audits – During this period, the IRS will generally not start new field, office and correspondence examinations. However, the IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
Independent Office of Appeals – Appeals employees will continue to work their cases over the telephone or by videoconference.
Statute of Limitations – The IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period, taxpayers are encouraged to cooperate in extending such statutes. Otherwise, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.
We continue to monitor any governmental responses to the COVID-19 pandemic and other actions to keep you as informed as possible.
Stay safe and healthy. Take care of your families, friends and others during this difficult time.
Please contact any of our tax attorneys for further advice and analysis.
