FAQs on Suspended Installment Agreements

The IRS released new FAQs for taxpayers on suspended installment agreements. Taxpayers with an existing installment agreement/payment plan with payments due between April 1 and July 15 were suspended due to the Coronavirus pandemic.

tax cpaIRS’s updated FAQs include the following updates:

Interest and penalties while installment agreement is in effect. Interest and late-payment penalties continue to accrue on any unpaid taxes, but the failure-to-pay-tax penalty rate is cut in half while an installment agreement is in effect. The normal penalty rate of 0.5% per month is reduced to 0.25%.

When the taxpayer is unable to meet his current installment agreement terms. If a taxpayer can’t meet their current installment agreement terms due to a Coronavirus related hardship, they can revise the agreement on IRS.gov/payment or call the customer service number on their IRS notice.

Monthly payment vouchers. The IRS did not mail monthly reminder payment vouchers during the suspension period due to IRS office closures caused by COVID-19, but will resume mailing reminder notices as IRS offices re-open. Taxpayers must resume making payments with their first payment due on or after July 16, 2020 to avoid default, even if they do not receive their monthly reminder notice.

Delays in processing. The IRS service to taxpayers may still be delayed. Taxpayers should “check IRS operations and services for the most up-to-date status”.

View the FAQs on installment agreements here.

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