The internal Revenue Service (IRS) has launched its People First initiative to offer relief to those having trouble paying their taxes due to the outbreak of COVID-19.
The project starts April 1 2020 and runs until July 15 2020. During this period certain payments related to installment agreements will be postponed and enforcement actions will be limited. Also, the IRS will avoid person-to-person interactions, although it will continue to protect all applicable statutes of limitations.
Key Actions
If you have an installment plan in place, you can breathe easy, since the payments due between April 1 and July 15 will be suspended, although interest will continue to accrue on unpaid balances.
The agency will suspend field collection activities during this period as well. New delinquent accounts will not be forwarded to private collection companies, but the IRS will continue to purse high-income non-filers. If you haven’t filed taxes before 2019, it’s advisable to seek the assistance of a tax expert to file your delinquent returns.
Offers in Compromise (OIC) and Tax Day
Taxpayers experiencing problems to pay their taxes can apply for a Payment Plan through the IRS’ official website. This way, the will be able to pay their balance over time, if they are eligible.
There are several provisions regarding Offers in Compromise (OIC). This is an agreement between the IRS and a taxpayer to settle the taxpayer’s tax liabilities for less than the full amount they owe. The agency will allow taxpayers until July 15 to provide additional information for a pending OIC and it will not close any pending OIC request before that date without the taxpayer’s consent.
It’s important to note that as part of the IRS’ relief efforts, the federal Tax Day has been moved from April 15 to July 15. You don’t have to take any further actions to take advantage of this extension. It will apply automatically to all taxpayers. However, keep in mind that there are different regulations regarding state taxes. Therefore, make sure to check them in order to stay compliant.
A Fluid Response
The government’s response to COVID-19 is fluid. In fact, the People First Initiative may change to better adjust it to future circumstances. Check constantly this blog and the IRS’ website to stay up-to-date as the situation evolves.
It’s important to know this and other initiatives to navigate the current circumstances. Our knowledgeable experts at JT Tax Services will assist you so you can take advantage of all the relief initiatives you are eligible for.
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