Neil V. Birkhoff

Neil V. Birkhoff
Principal

In a news release issued Wednesday, March 25, IR-2020-59, the Internal Revenue Service (IRS) announced it will immediately suspend certain tax payments and compliance programs, and the agency pledged generally to not start new audits or private debt collections until at least July 15.

“The IRS is taking extraordinary steps to help the people of our country,” said IRS Commissioner Chuck Rettig. “In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues.”

The IRS suspension of collection activities is to begin by April 1, 2020. The announced changes include postponing certain payments related to Installment Agreements and Offers in Compromise, as well as suspending collection actions and limiting certain enforcement actions. The IRS news release states the agency will be temporarily modifying the collection and compliance activities as soon as possible, with a projected start date of April 1, and an initial run through July 15.

Key actions in the IRS People First Initiative

Existing Installment Agreements

  • Payments due between April 1 and July 15, 2020 are suspended.
  • Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer.
  • The IRS will not default any Installment Agreements during this period.
  • Interest will continue to accrue on any unpaid balances.

Pending Offer in Compromise (OIC) applications

  • The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC.
  • The IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.

OIC Payments

  • Taxpayers will have the option of suspending all payments on accepted OICs until July 15, 2020.
  • By law, interest will continue to accrue on any unpaid balances.

Delinquent Return Filings and OIC Defaults

  • The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018.
  • Taxpayers are reminded to file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.

Non-Filers and Potential Refunds

  • The IRS news release emphasizes that people who have not filed their return for tax years before 2019 should file their delinquent returns. The IRS notes that more than 1 million households that have not filed tax returns during the last three years are actually owed refunds, and they still have time to claim these refunds.
  • Once delinquent returns have been filed, taxpayers with a tax liability are encouraged to consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.” Details of the Fresh Start program are available at IRS.gov.

Liens, Levies, and Other Field Collection Activities

  • Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period.
  • Revenue Officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

Automated Liens and Levies

  • New automatic, systemic liens and levies will be suspended during this period.

Passport Certifications to the State Department

  • IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during this period.

Private Debt Collection

  • New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Field, Office, and Correspondence Audits

  • During this period, the IRS will generally not start new field, office and correspondence examinations.
  • The IRS may start new examinations if necessary to protect the government’s interest in preserving the applicable statute of limitations.

In-Person Meetings

  • In-person meetings regarding current field, office and correspondence examinations will be suspended. IRS auditors, however, will continue examinations remotely, where possible.

Earned Income Tax Credit and Wage Verification Reviews

  • Taxpayers will have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income. These taxpayers are encouraged to exercise their best efforts to obtain and submit all requested information, and if unable to do so, to contact the IRS indicating the reason such information is not available.
  • Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information.

Independent Office of Appeals

  • Matters pending before IRS Appeals employees will continue to be worked. Conferences may be held over the telephone or by videoconference.

This initiative by the IRS will be an evolving policy. “The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” according to the Commissioner. “We are committed to helping people get through this period, and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others.”

If you have questions about the IRS collection and compliance relief, please contact one of the attorneys in the Tax Group at Woods Rogers.

Read more legal updates on COVID-19 from Woods Rogers attorneys.


If you have any questions about the IRS People First Initiative:
Email Neil Birkhoff at birkhoff@woodsrogers.com.
View Neil’s profile.