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IRS Temporarily Eases Tax Compliance and Enforcement Programs in Response to Coronavirus

March 26, 2020

In response to the ongoing coronavirus outbreak, the IRS announced its new People First Initiative to provide relief to taxpayers facing compliance and enforcement. The IRS indicated that the Initiative will begin on April 1 and will run through July 15.  The IRS announcement provides a summary of the modifications being considered. Specific details about the operation of these measures will be available at a later date.

 The IRS will be offering the following modifications to its collection and enforcement procedures between April 1 and July 15, 2020 (the “Period”):

  • Installment Agreements: Taxpayers under existing Installment Agreements, who are having trouble making their payments, can suspend payments during the Period. The IRS will not default any Installment Agreements during this time for non-payment. Interest will continue to accrue on the unpaid balance.  We await guidance on whether there are any limitations on this measure.
  • Offers in Compromise (“OIC”):
    • For pending OIC applications, the IRS will give taxpayers until the end of the Period to provide requested additional information to support a pending OIC. The IRS will not close any pending OIC request before the end of the Period. Additionally, the IRS will not default an OIC for taxpayers who have not filed a 2018 return. Taxpayers should file 2018 and 2019 returns by July 15, 2020.
    • Taxpayers making OIC payments, can suspend payments during the Period. Interest will continue to accrue on the unpaid balance.
  • Liens and Levies: New automated liens and levies are suspended during the Period and enforcement of liens and levies, such as seizures of personal residences, are generally suspended during the Period.  The IRS will continue to pursue high-income non-filers and other collection where warranted.
  • Private Debt Collection: New delinquent accounts will not be sent to private collection agencies during the Period.
  • Audits: The IRS will not, generally, start new field, office or correspondence audits during the Period. The IRS has suspended in-person meetings, but will continue existing examinations and refund claims remotely, where possible. The IRS may start new audits where deemed necessary to protect the government’s interest in preserving the statute of limitations.
  • Appeals: Appeals will continue to work cases remotely.
  • Earned Income Tax Credit (“EITC”) and Wage Verification Reviews: Taxpayers have until the end of the Period to respond to the IRS to verify that they quality for EITC. The IRS will not deny these credits for failure to provide information until the end of the Period.
  • Passport Certification to the State Department: The IRS will suspend new certifications to the Department of Sate of taxpayers who are “seriously delinquent” during the Period.  Taxpayers who are seriously delinquent are encourage to seek an Installment Agreement or OIC to avoid certification. 

The IRS also reminded taxpayers who have not filed their returns for tax years before 2019, that they should file their delinquent returns. Over 1 million households who have not filed taxes in the last 3 years are owed refunds. Those taxpayers who owe past due taxes, can consider resolving their liabilities by entering into new Installment Agreements or Offers in Compromise with the IRS.

If you have any questions, please contact a Hall Estill tax attorney today.