On Wednesday, March 25, the IRS announced a series of steps that provide taxpayer relief on a variety of fronts, ranging from easing payment guidelines to postponing compliance and collections actions, including installment agreements and offers in compromise.

The projected start date of the “People First” initiative is April 1, and the effort will initially run through July 15. The initiative is described in detail on the IRS website.

Highlights include the following:

Existing Installment Agreements. For taxpayers under an existing installment agreement, 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. While the IRS will not default any installment agreements during this period interest will continue to accrue, by law, on any unpaid balances.

New Installment Agreements. As before, taxpayers who are unable to fully pay their federal taxes can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS.

Offers in Compromise (OIC). The IRS is taking steps to assist taxpayers in various stages of the OIC process:

• Pending OIC Applications: Taxpayers have until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.
• OIC Payments: Taxpayers may suspend all payments on accepted OICs until July 15, 2020, but interest will continue to accrue on any unpaid balances.
• Delinquent Return Filings: The IRS will not default an OIC for taxpayers who are delinquent in filing their 2018 tax return. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.

Also during the period of the People First initiative:

Field Collection Activities. Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

Automated Liens and Levies. New automatic liens and levies will be suspended.

Passport Certifications. The IRS will suspend new certifications to the State Department for taxpayers who are “seriously delinquent.” Certification prevents taxpayers from receiving or renewing passports. Affected taxpayers are encouraged to submit a request for an installment agreement or, if applicable, an OIC during this period.

Private Debt Collection. New delinquent accounts will not be forwarded by the IRS to private collection agencies.

Field, Office and Correspondence Audits. The IRS will generally not start new field, office and correspondence examinations but will continue to work refund claims where possible, without in-person contact. The IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations. Also, in-person meetings regarding current field, office and correspondence examinations will be suspended.

MESSAGE FROM THE IRS COMMISSIONER

“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,” said IRS Commissioner Chuck Rettig in announcing the People First initiative.

“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.”

If you have any questions or comments, please contact a Frazer Ryan tax attorney at 602-277-2010.