Because of the COVID-19 global pandemic, the IRS took a series of steps to ease the burden on citizens who may have concerns about meeting their tax obligations. Although some taxpayers may not be aware of it, the People First Initiative took effect on April 1, 2020, and was set to run at least until the filing deadline of July 15, 2020. Then, it came with the possibility for extension.
The People First Initiative includes numerous benefits for people who are currently experiencing unpaid tax liabilities during this difficult and uncertain time. The changes provide relief for a variety of issues ranging from the easing of payment guidelines to suspended compliance actions.
To determine how this initiative affects you and the best way to take advantage of it, consult the Silver Tax Group. Experienced tax attorneys are available to help you navigate this initiative in order to get the relief your business needs.
The People First Initiative
The IR-2020-59, the People First Initiative, was designed to help citizens meet their tax obligations while experiencing a total loss of or decrease in income. In addition to extending tax deadlines and working on new tax legislation, the IRS took action to alleviate some of the burden.
According to IRS Commissioner Chuck Rettig, the initiative was enacted as part of an ongoing response to the coronavirus crisis. It is meant to be a solution for improving the lives of people in this country who may be facing tax issues during financial uncertainties. This is part of the government’s ongoing desire to help improve the situation for all.
Types of Relief Offered By the IRS
The following are the key actions of the People First Initiative:
1. Installment Agreements
Payments on existing installment agreements are suspended as of April 1. This means that taxpayers who make monthly payments toward their tax liability can temporarily cease payments if they are unable to make them. Those with Direct Debit installment agreements have been allowed to stop those automatic payments if they prefer. By law, however, interest on all unpaid balances will continue to accrue.
Taxpayers without an installment agreement in place who cannot fully satisfy their federal tax liabilities are reminded that they have the option to enter into a new installment agreement.
2. Offers in Compromise (OIC)
An Offer in Compromise allows a taxpayer to settle a debt with the IRS for an amount less than what was originally owed. For people facing a tax liability that exceeds their net worth, the OIC process is designed to provide a “Fresh Start”.
During the People First Initiative, pending OICs have not been closed by the IRS due to any missing information. This gives filers additional time to provide requested documents. Taxpayers can also suspend payments on existing OICs without the threat of default.
3. For Non-Filers
For those who haven’t filed a tax return for the years prior to 2019, the initiative encourages filing delinquent returns in an effort to collect refunds that may be due. Since the time to receive refunds is limited by statute, a tax professional can help with available options for getting a refund before time runs out. If taxes are owed, you as the taxpayer can take the opportunity to resolve any outstanding balance with an Installment Agreement or an Offer in Compromise.
IRS Suspended Services
COVID-19 halted all in-person activities for the IRS. This includes:
- In-person Meetings. All field, office, and correspondence examinations are suspended with no new examinations started during his period. Necessary examinations can happen remotely, if possible.
- Field Collection. Activities such as liens and levies (including seizures of personal property) are suspended as are automated, systemic liens and levies. Revenue officers may continue to pursue high-income non-filers where warranted.
- Passport Certifications. Certifications to the State Department that prevent taxpayers who are seriously delinquent from receiving or renewing passports are suspended.
- Field, Office, and Correspondence Audits. Audits are suspended during this period except in cases where it is deemed necessary to protect the government’s interest in preserving the statute of limitations.
- Private Debt Collection. The IRS halted the forwarding of new delinquent accounts to private debt collectors.
IRS Continuing Activities
The IRS will continue to handle refund claims with no in-person contact. Taxpayers are encouraged to respond to IRS correspondence for additional information if it is possible to do so during this time. The Office of Appeals will continue to operate, but conferences may be held over the telephone or via video conference. Taxpayers are reminded that there may be considerable wait time for live telephone assistance.
In unique situations for some business and corporate taxpayers, there may be a desire to begin examination proceedings while records and staff are available. If it’s in the best interest of both parties, the IRS may move forward with the examination understanding that COVID-19 could reduce activities for an unspecified period.
Throughout this period, the IRS will protect all statutes of limitations and encourage taxpayers to cooperate in extending such statutes. According to Chuck Rettig, the IRS will continue to review, modify, or expand the People First Initiative as aid is needed and feedback is received.
Get Help From Silver Tax Group
The People First Initiative was set to end on July 15, 2020, so the time to explore how it may affect you is now. To take full advantage of this initiative or for help with another tax situation, let Silver Tax Group guide you. We offer emergency tax services and top-quality tax-consulting to aid you in making smart decisions so that you can maximize your tax savings while remaining compliant.
Contact us today to schedule a free consultation for IRS Audit Defense, Tax Court Litigation, Criminal Tax Defense, Unfiled Tax Returns, Seizure of Assets, Offers in Compromise, Streamlined Installment Agreements, and more. We bring over four decades of federal tax experience to your case.