Highlights of the People First Initiative

The IRS announced its People First Initiative to provide taxpayers with immediate relief on various issues such as compliance and payment guidelines as a result of the Coronavirus pandemic. The projected start date will be April 1 and will initially run through July 15. The IRS will continuously review and modify the People First Initiative as appropriate.

Highlights of the People First Initiative:

Existing Installment Agreements

tax cpaPayments due between April 1 and July 15, 2020 for taxpayers under and existing Installment Agreement are suspended. Taxpayers who are currently unable to meet the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period. The IRS will not default any Installment Agreements during this time. 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 request 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. 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. 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 urged people who have not filed their return for tax years before 2019 that they should file their delinquent returns. Over 1 million households that haven’t filed tax returns during the last three years are actually owed refunds and they still have time to claim these refunds. Many should consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute.

Once delinquent returns have been filed, 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.” See IRS.gov for further information.

Field Collection Activities

Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. 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. Taxpayers are encouraged to submit a request for an Installment Agreement or 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

The IRS will not start new field, office and correspondence examinations, but will continue to work refund claims where possible, without in-person contact. New examinations may start, 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 will continue their examinations remotely, where possible. Taxpayers should to respond to any requests for information they already have received, or may receive, on all examination activity.

Unique Situations

The IRS understands that there may be instances where taxpayers prefer 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 with an understanding that COVID-19 developments could later reduce activities.

General Requests for Information

The IRS encourages taxpayers to respond to any 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. Conferences may be held over the telephone or by videoconference. Taxpayers should 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.

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