IRS response to COVID-19 pandemic: How the IRS People First Initiative is designed to help struggling taxpayers

In response to the challenges of COVID-19, the IRS launched the "People First Initiative" on March 25 to help taxpayers who are looking for tax relief or already working with the IRS.

Tax relief is available for the following situations:

If you have an existing Installment Agreement
If you are considering a new Installment Agreement
If you have a current Offer In Compromise (OIC)
If you are considering a new Offer In Compromise
If you are a non-filer
If you are getting notices from IRS
If you have had a lien or levy

Existing Installment Agreements

No payments are due on installment plans until July 15, 2020. If you are unable to comply with the terms of your Installment Agreement, you don't have to make any payments between April 1, 2020 and July 15, 2020. Interest will still accrue on your debt, but you don't have to worry about late fees or losing your arrangement. Note that you must contact your bank to suspend automatic payments.

New Installment Agreements

If you have a tax liability for 2019 or prior years and you are unable to fully pay it, you can set up a monthly payment agreement with the IRS. This has always been available, but more people may be looking into this option with the current economy.

Existing Offer in Compromise (OIC) Agreements

If you're currently involved in an OIC, and the application is pending, the IRS will allow you to submit requested information to support the application until 7/15/2020. The IRS will not close any pending OIC requests before 7/15/2020 without the taxpayer’s consent.

Offer in Compromise (OIC) payments due are suspended until 7/15/2020 (interest will still accrue.)

New Offer in Compromise (OIC) Applications

If you are facing a tax liability that exceeds your net worth, the OIC process is designed to resolve that tax liability to get a fresh start with the IRS through a settlement for a lesser amount.

If you have back taxes you owe the IRS, right now is a great time to apply for an Offer In Compromise. Compromised settlements may be more achievable.

Non-Filers

If you have outstanding tax returns, you may want to take advantage of the lockdown to catch up with your filing requirements. More than a million households are actually owed money from the IRS. You can get those refunds for up to 3 years.

If you end up owing money, filing now helps stop penalties from accruing on your debt and you can work with the IRS to set up a payment plan, apply for an OIC, or make other arrangements.

Another compelling reason to file those tax returns is that the stimulus package is based on your 2018 or 2019 returns. They will look to your tax returns for your current address and banking information to deposit your relief check.

Other key highlights of the IRS People First Initiative:

No field collections
Liens and levies will be suspended
No unpaid debt to the IRS will be sent to collection agencies
No new audits will be started
Passport denial or revocation has been suspended

Dealing with tax debt can be overwhelming, but the IRS People First Initiative is designed to help. If you have been ignoring a tax debt, this initiative presents the perfect opportunity to make an arrangement and still have some time before you need to start making payments.

James Hintzke specializes in tax resolution services for both individuals and businesses throughout northern Wisconsin - from Wausau to as far east as Appleton, to Superior in the northwest, and as far north as Michigan's Upper Peninsula. We can help you set up payments for back taxes owed, reduce the amount owed, eliminate penalties, or take other steps to get you back in good standing with the IRS. Contact us today to set up an appointment.

I have extensive expertise in assisting individual taxpayers, businesses, and seniors with the following issues when dealing with the Internal Revenue Service and Wisconsin Department of Revenue:

Stop wage garnishments and bank levies
Remove or Reduce tax penalties
File tax returns for multiple tax years
Negotiate tax repayment settlements
Appeal unacceptable audit or collection outcomes
Resolve tax identity Theft issues
Out of State tax return issues
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