COVID-19: IRS Provides Relief from Enforcement Actions
The IRS can do a lot of bad things to you—such as levying your bank accounts and wages, or auditing your tax returns—if you don’t follow the tax law or don’t pay the taxes you owe. But during the COVID-19 pandemic, the IRS is stopping almost all of its enforcement activities to give you space to better manage your personal and financial affairs.
In this article, we’ll tell you exactly what things you no longer have to fear from the IRS, and for how long. The IRS issued an information release providing broad details of its People First Initiative, which reduces IRS enforcement actions to give you more financial flexibility during the COVID-19 pandemic.
Installment Agreements
If you have an installment agreement with the IRS, then the IRS is suspending your payments due between April 1 and July 15, 2020.
The IRS will not default any installment agreements during this period.
Remember—interest will continue to accrue on any unpaid balances, so if you have the financial resources, you may want to continue to pay.
For more information, read Owe Back Taxes? Try Deals That the IRS Accepts.
Offers in Compromise
If you have a pending offer in compromise, then the IRS will allow you until July 15, 2020, to provide requested additional information to support your offer. The IRS will not close any pending offer in compromise requests before July 15, 2020, without your consent.
If the IRS has accepted your offer in compromise, then you can suspend all payments toward it until July 15, 2020.
The IRS won’t default your accepted offer in compromise for a failure to file your 2018 tax return. But you should file your delinquent 2018 return (and your 2019 return) on or before July 15, 2020, to avoid default.
Think an offer in compromise might help you? Take a look at Yes, You Can Settle Your IRS Tax Debts for Less Than You Owe.
Collection Actions
IRS field revenue officers won’t initiate liens and levies (including any seizures of personal residences) through July 15, 2020; however, they will continue to pursue high-income non-filers and perform other similar activities as needed.
In addition, consider the following actions:
The IRS won’t initiate new automatic, computer-generated liens and levies through July 15, 2020.
The IRS will suspend new certifications to the Department of State for taxpayers who have “seriously delinquent” tax debt through July 15, 2020. Certification prevents you from receiving or renewing a passport. If your tax debts are subject to certification, you should submit a request for an installment agreement, an offer in compromise, or another collection alternative, prior to July 15, 2020.
The IRS won’t send new delinquent accounts to private collection agencies through July 15, 2020.
The last two are new IRS enforcement programs. If you don’t know about them, we’ve covered them in the following articles:
Audits
The IRS generally will not start new field, office, or correspondence examinations through July 15, 2020. But it may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
The IRS suspended all in-person meetings regarding current field, office, and correspondence audits. Existing audits will continue remotely, where possible. You should continue to respond to any requests for information you’ve received if you are able to do so.
What if you are ready, willing, and able to get your audit started? The IRS may agree to begin the audit before July 15, 2020, if it has personnel available.
If you are facing an IRS audit, these articles are a must-read:
Independent Office of Appeals
If you have a case in the Independent Office of Appeals, then Appeals employees will continue to work your case. You should promptly respond to any new or existing requests for information.
Takeaways
If you have IRS problems, the COVID-19 pandemic is creating a mercy period for you that ends July 15, 2020. During the mercy period, the IRS is suspending
installment agreement payments,
new levies and liens,
new audits,
new passport actions, and
new referrals to private debt collectors.
Use this break in IRS enforcement through July 15, 2020, as a great opportunity to get back on track and solve any existing IRS tax problems you have, such as
completing and sending in those unfiled tax returns;
getting an installment agreement in place for your unpaid debts; or
requesting an offer in compromise for tax debt you will not be able to pay.