COVID-19 created unprecedented financial challenges for US citizens. Although the IRS offers numerous tax relief programs including the Fresh Start Program for those who owe back taxes, more needed to be done for those who didn’t meet the strict qualifications of available tax relief programs the IRS offered. The new IRS Taxpayer Relief Initiative is expanding on these previous tax relief options.
The IRS reviewed its collection activities to see how it could provide relief for delinquent taxpayers who owe back taxes however are struggling financially due to the effects of the COVID-19 pandemic. After their review the IRS has expanded taxpayer options for making payments and other ways to resolve tax liabilities.
These revised collection procedures will be helpful to all taxpayers, especially those who have a record of filing their returns and paying their taxes on time.
Here are the highlights of the IRS Taxpayer Relief Initiative:
- Taxpayers who qualify for a short-term payment plan may now have up to 180 days to resolve their delinquent tax liabilities instead of 120 days.
- The IRS is offering flexibility for qualified taxpayers temporarily unable to meet the payment terms of an accepted Offer in Compromise.
- The IRS will automatically add certain new tax balances to existing Installment Agreements, for both individual and business taxpayers who have gone out of business.
- Certain qualified individual taxpayers with liabilities of less than $250,000 may set up Installment Agreements without providing a financial statement if their monthly payment proposal is sufficient.
- Some individual taxpayers that only owe for the 2019 tax year and owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
- Qualified taxpayers with existing Direct Debit Installment Agreements may be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.
Additional tools to assist taxpayers who owe taxes:
Temporarily delaying collection — Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer qualifies, the IRS may delay collection until the taxpayer’s financial condition improves.
Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise. Now, the IRS is offering additional flexibility for some taxpayers who qualify however are temporarily unable to meet the payment terms of an accepted offer in compromise.
Relief from penalties — Reasonable cause assistance is available for taxpayers who fail to pay on time, file their return on time or are responsible for deposit penalties. Based on specific criteria taxpayers may qualify for their first time penalty abatement policy.
Many taxpayers requesting payment plans, including installment agreements, can apply through IRS.gov. In the event, you have any questions and need professional tax relief guidance, you can contact the W Tax Group for a 100% free tax relief consultation.
