IRS Gives Taxpayers More Flexibility

Economic fall-out brought on by the COVID-19 pandemic has caused the IRS to make changes to its tax collection program, which will allow taxpayers with outstanding tax items more flexibility as they cope with financial hardships. Some of the implemented changes aim to make the set-up process for payments easier and allows compromises as part of the Taxpayer Relief Initiative. Additionally, the IRS has implemented a new system called SafeSend Returns, which allows for the collection, secure delivery, and gathering of e-signatures from taxpayers no matter their location. 

The IRS is offering other forms of relief:

Tax Liabilities. Taxpayers who qualify for a short-term payment plan have 180 days, rather than 120 days, to resolve their tax liabilities.

Flexibility. Taxpayers who are unable to meet the payment terms of a currently accepted offer in compromise will receive additional flexibility.

Automatically Addition of New Tax Balances. New tax balances will be automatically added to existing installment agreements instead of defaulting the agreement for both individuals and out-of-business taxpayers.

Installment Agreements Without a Financial Statement. Individual qualified taxpayers that owe less than $250,000 can establish installment agreements with the IRS without a financial statement or substantiation, as long as their monthly payment proposal meets the minimum requirement.

Installment Agreement Without a Tax Lien. Individual taxpayers who only owe outstanding taxes for 2019 and less than $250,000 can qualify to establish an installment agreement without a tax lien notice filed by the IRS.

Online Payment Agreement System. Taxpayers that are qualified and who have an existing direct deposit installment agreement with the IRS are eligible to use the Online Payment Agreement system to lower their monthly payment amount and alter the due dates of payments. The IRS is offering options for both short and long-term payment plans, including installment agreements via the Online Payment Agreement system. This is available to those who owe $50,000 or less in income tax, penalties and interest, or to business that have filed all tax returns and owe less than $250,000 combined. Additionally, the IRS is allowing taxpayers to contact them if they would like to temporarily delay the collection process.

The IRS is emphasizing reasonable cause assistance for those who fail to file, pay and deposit penalties in an effort to provide relief. For first-time relief, the IRS is offering penalty abetment relief, which can be filled out online via the IRS website.

We are keeping up-to-date as new legislation and provisions are passed and are committed to keeping our clients well-informed. If you have any questions, or need any assistance, please don’t hesitate to reach out.