The Internal Revenue Service (IRS) has announced a series of steps to assist taxpayers impacted by COVID-19. Relief ranges from easing payment guidelines to postponing compliance actions.
COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to John Hopkins, as of March 25, 2020, there are 451,355 confirmed cases of COVID-19 in 172 territories and countries. The United States has 55,568 confirmed cases with reported cases in every state.
As a result, on March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Additionally, several Governors have issued stay-at-home orders.
The result is that many taxpayers cannot get out to file or do other tax-related business. In response, the IRS announced that the tax filing season been pushed to July 15, 2020.
The IRS also started scaling back operations at its call centers, causing frustration for tax professionals and taxpayers alike. Now, the IRS is taking further action.
“The IRS is taking extraordinary steps to help the people of our country,” said IRS Commissioner Chuck Rettig. “In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. During this difficult time, we want people working together, focused on their well-being, helping each other and others less fortunate.”
Specifically, the IRS is introducing its IRS People First Initiative. “The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes,” Rettig says.
“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.”
So what’s in the initiative? Highlights include:
Existing Installment Agreements. For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020, are suspended. 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). Taxpayers with pending OIC applications will have until July 15 to provide requested additional information as support; the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent. Taxpayers with accepted offers can suspend payments on until July 15, 2020, although by law, interest will continue to accrue on any unpaid balances. Further, the IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for the tax year 2018; 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 through July 15, 2020. 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 through July 15, 2020.
Passport Certifications to the State Department. IRS will suspend new passport certifications to the Department of State for taxpayers who are “seriously delinquent” through July 15, 2020.
Private Debt Collection. New delinquent accounts will not be forwarded by the IRS to private collection agencies to work through July 15, 2020.
Field, Office, and Correspondence Audits. The IRS will generally not start new field, office, and correspondence examinations until July 15, 2020 (but see the note below related to statutes of limitations).
- In-Person Meetings. In-person meetings for existing field, office, and correspondence examinations will be suspended. IRS examiners will continue examinations remotely where possible. Taxpayers are encouraged to respond to requests for information on all examination activity during this period if possible.
- Unique Situations. The IRS understands that there may be instances where the taxpayers desire to begin an examination. When it’s in the best interest of both parties and appropriate personnel are available, the IRS may initiate activities to move forward with an examination.
Refund Claims. The IRS will continue to work refund claims where possible, without in-person contact.
General Requests for Information. The IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this time, if possible.
Earned Income Tax Credit (EITC) & Wage Verification Reviews. Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the EITC or to verify their income. Through July 15, 2020, the IRS will not deny these credits for a failure to provide the requested information.
Independent Office of Appeals. Appeals will continue to work cases. Conferences may be held over the telephone or by videoconference. Taxpayers are encouraged to promptly respond to any outstanding requests for information for all cases in the Independent Office of Appeals.
Statute of Limitations. The IRS will continue to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized, taxpayers are encouraged to cooperate in extending such statutes. Otherwise, the IRS will issue Notices of Deficiency and take steps 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 significant collections and related actions until at least July 15, 2020.
Practitioner Priority Service (PPS). The IRS warns that there may be more significant wait times for the PPS. However, practitioners, including myself, are reporting that they are unable to reach representatives. Currently, when you call, a message advises, “Live telephone assistance is not available at this time.”
Expect that some of this could change. Rettig advises, “The IRS 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.”
“We are committed to helping people get through this period,” he said, “and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others.”