IRS News
New Relief for Taxpayers Experiencing COVID-19-related Financial Difficulties
Get to know the IRS, its people and the issues that affect taxpayers By Darren Guillot | November 2, 2020
At the IRS, we recognize these are challenging times for everyone, and we understand that many Americans still face COVID-related hardships.
I’m from Louisiana originally, and I know this has been a difficult year in many states dealing with both COVID and natural disasters. In times like these, dealing with tax issues can be tough. And we want people to know our employees are committed to continue helping taxpayers wherever possible, including offering many options for those struggling to pay their tax bills.
Earlier this year, we provided extensive relief and temporarily adjusted our processes to help people and businesses through our People First Initiative, which was in effect for the first months of COVID. While it’s been important for us, and the nation to resume our critical tax compliance responsibilities, we continue to assess the wide-ranging impacts of COVID-19 and other difficulties people are experiencing.
To that end, we’re offering a wide range of taxpayer relief options. Our three main goals to help taxpayers are:
First, we want to do everything we can under existing rules for immediate, broad-based relief from unpaid liabilities resulting from COVID-19 issues, including those affected by IRS mail processing and correspondence delays. Second, we’ll remove bureaucratic barriers and expand flexibilities to all taxpayers whose financial condition has been affected by COVID-19. This includes those still facing longstanding tax issues. And third, we’ll balance the relief provided against the need to uphold the nation’s tax laws. We’ll make sure we have adequate resources available to work complex cases or address egregious non-compliance. And we’ll work to secure the government’s interests in the event of future bankruptcies to uphold the laws and help ensure fairness in the tax system. Here’s an important point people shouldn’t overlook. If you have questions regarding paying your taxes, don’t go silent. Please don’t ignore the notice arriving in your mailbox. These problems don’t get better with time. We understand that dealing with the IRS can be intimidating, but our employees really are here to help.
And with COVID, we’re doing even more. When appropriate, we want to help taxpayers by taking steps like abating penalties, extending payment plans, expanding access to installment agreements, and providing relief for taxpayers having difficulty meeting the terms of previously accepted offers to settle tax debts.
Our new initiatives offer help in a variety of ways. Taxpayers without income or the ability to pay can request a temporary suspension of collection activity through the Currently-Not-Collectible program. Taxpayers with balance due amounts may qualify for installment agreement options with generous terms and timeframes, and taxpayers with existing Online Payment Agreements (OPA), or Direct Debit Installment Agreements (DDIA) can propose lower monthly payment amounts and update their payment due dates. Other penalty relief options include first-time abatement for reasonable cause.
Here’s a "Closer Look" at some of the specific details of the initiatives we’re offering:
Helping People: IRS Taxpayer Relief Initiatives
The IRS is highlighting reasonable cause assistance available through IRS procedures for failure to file, failure to pay and failure to deposit penalties. First time abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.
For individual taxpayers receiving notices (letters about a tax bill) with tax liabilities up to $250,000 for Tax Year 2019 only, the IRS can offer one Installment Agreement opportunity with no lien filed.
The IRS is extending the short-term payment plan timeframe to 180 days (normally 120 days).
The IRS is easing paperwork requirements to allow individuals more flexibility to get non-streamlined Installment Agreements up to $250,000 without financial verification, if their case is not yet assigned to a revenue officer.
Extend guidance to automatically include new tax year balances accrued in existing Installment Agreements. (Individuals and Out of Business entities only)
The IRS will provide relief for taxpayers having difficulty meeting the terms of previously accepted offers.
That’s a lot of detail, but it’s important for taxpayers experiencing COVID-19-related financial difficulties to know about these available options and how to get the help they need.
Here’s the bottom line: If you’re struggling with your tax bill, reach out to us. Don’t be intimidated. Our people can help you walk through it. And if you need the services of a tax professional, that’s a great option as well. But please take a few minutes to do some research first. Make sure you’re getting a reputable representative, and not some fly-by-night outfit on late night television or the radio that charges fees for things the IRS does for free – or at minimal cost. We appreciate the support of tax professionals and other partners in getting the word out – I know they’re just as committed as we are to helping those in need.
These challenging times call for us to do what we can to help one another. I’m proud to say the IRS stands ready to assist taxpayers as we work through this situation together.
Darren John Guillot Deputy Commissioner for Small Business and Self-Employed Collection & Operations Support
Keith L. Jones, CPA TheCPATaxProblemSolver