IRS Issues People First Initiative
March 26, 2020 | By Delap CPA |
The Internal Revenue Service has announced additional steps the agency is taking to help taxpayers who are facing challenges as a result of the COVID-19 pandemic. The new IRS People First Initiative includes the following key provisions:
- Existing Installment Agreements – For taxpayers under an existing Installment Agreement, 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, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.
- New Installment Agreements – The IRS reminds people unable to fully pay their federal taxes that they can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. See IRS.gov for further information.
- 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 requests 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.
- New OIC Applications – The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed to resolve outstanding tax liabilities by providing a “Fresh Start.” Further information is available at IRS.gov
- Non-Filers –The IRS reminds people who have not filed their return for tax years before 2019 that they should file their delinquent returns. Refunds may be available to many; however, taxpayers with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.”
- 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. These taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period. Certification prevents taxpayers from receiving or renewing passports.
- Private Debt Collection – New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.
- Field, Office, and Correspondence Audits – During this period, the IRS will generally not start new field, office, and correspondence examinations. The IRS will continue to work refund claims where possible, without in-person contact. However, the IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
- In-Person Meetings – In-person meetings regarding current field, office, and correspondence examinations will be suspended. IRS examiners will continue their examinations remotely, where possible. To facilitate the progress of open examinations, taxpayers are encouraged to respond to any requests for information they already have received — or may receive — on all examination activity during this period if they are able to do so.
- Unique Situations – Particularly for some corporate and business taxpayers, the IRS understands that there may be instances where the taxpayers desire to begin an examination while people and records are available and respective staffs have capacity. In those instances 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 — understanding that COVID-19 developments could later reduce activities for an agreed period.
- General Requests for Information – In addition to compliance activities and examinations, the IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this time if possible.
- 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. These taxpayers are encouraged to exercise their best efforts to obtain and submit all requested information, and, if unable to do so, please reach out to the IRS indicating the reason such information is not available. Until July 15, 2020, 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. Although Appeals is not currently holding in-person conferences with taxpayers, 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 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.
The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as they continue reviewing programs and receive feedback.
The IRS will continue to process electronically received tax returns. Returns received on paper are being processed but much slower than normal. Refunds are being issued, and Where’s my Refund is still available to track your refund, but paper filed returns will take longer. There will be a sharp decrease in the IRS responses to paper inquiries and correspondence. All cases in U.S. Tax Court have been cancelled through July 3, 2020.
- If you require an extension beyond July 15, 2020, you will need to file either Form 4868 or Form 7004 by July 15, 2020.
- If you have an appointment with any department of the IRS, there is no need to cancel your appointment. Keep a lookout for a call or other communication from the agent who is identified on your original notice or with whom you have been working.
- The states each have their own separate updates that are changing constantly. Please check the AICPA chart for updates.
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