IRS Institutes Collection Relief Due to Covid

The IRS has instituted the Taxpayer Relief Initiative to help those taxpayers who owe the IRS and are struggling financially due to the pandemic.

Here are some benefits from the new collection procedures:

  1. If you otherwise qualify for a short term payment plan, the IRS will give you 180 days to pay rather than 120 days.
  2. If your offer in compromise was accepted, but you are unable to meet the payment terms of the offer, the IRS will provide temporary relief on a case by case basis.
  3. For individual and business taxpayers that have gone out of business, the IRS will automatically add certain new tax balances to existing installment agreements. The IRS typically will default your installment agreement if a new balance is incurred which requires you to call them and get the new tax year added to the agreement.
  4. Certain qualified individual taxpayers who owe less than $250,000.00 may set up an installment agreement without completing a 433a or b if their monthly payment proposal meets IRS guidelines.
  5. Individuals with tax bills $250,000.00 for 2019 only can set up a installment agreement with no lien filed. Typically, the IRS will automatically file a lien if you owe $25,000.00 or more. Liens can affect your credit and if one is placed on any real property you own, you’ll have to take extra steps to get it removed.
  6. If you owe $250,000 or less, (no particular tax year), the IRS is easing paperwork requirements and allowing for streamlined payment agreements. Those typically are agreements that take what you owe and simply divide that number by the amount of months in the payment plan which typically go no later than 72 months, but could be extended to 84.
  7. Offer easier reasonable cause for first time taxpayers that have a penalty attached to an amount that they owe.

Some of this is vague, which is probably the way the IRS wanted it so if you aren’t sure if you qualify, you should contact me and we’ll sort it out!