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IRS Offers New Relief for Taxpayer’s Who Owe Liabilities

Posted by Naveid Jahansouz on Nov 17, 2020 11:58:53 AM

Earlier this month, the IRS announced new policies designed to help taxpayers struggling due to the COVID-19 pandemic.

"The IRS understands that many taxpayers face challenges, and we're working hard to help people facing issues paying their tax bills," said IRS Commissioner Chuck Rettig. "Following up on our People First Initiative earlier this year, this next phase of our efforts will help with further taxpayer relief efforts."

Below are some of the key provisions of the new initiative: 

  • The IRS will now grant taxpayers who need a short-term payment plan to pay off their liabilities 180 days rather than the usual 120 days.
  • The IRS is offering flexibility for taxpayers who are unable to meet the payment terms of an accepted Offer in Compromise
  • The IRS will automatically add on certain new tax liabilities to existing installment agreements, rather than the installment agreement being defaulted
  • Taxpayers who owe less than $250,000 for the 2019 tax year may qualify to set up an installment agreement without the IRS filing a Notice of Federal Tax Lien.
  • Taxpayers who owe up to $250,000 in taxes might qualify to enter into an installment agreement without providing financial information or substantiation, if the monthly amount they propose is sufficient.
  • Taxpayers with existing Direct Debit Installment Agreements may now be able to use the IRS Online Payment Agreement System to propose lower monthly payments and change the payments' due date.

This new initiative follows the Taxpayer First Initiative, which ran from April 1 through July 15. That initiative provided taxpayers with relief from enforcement actions such as liens and levies in most cases. 

If you owe the IRS liabilities but are unable to pay in full, you have options, including but not limited to the following:

  • Installment Agreement – An agreement between a taxpayer and the IRS to pay the taxes in monthly installments
  • Offer in Compromise – An Offer by the taxpayer to the IRS to settle the total liability for less than the full amount owed
  • Currently Not Collectible – An agreement by the IRS to temporarily stop trying to collect the tax, due to the taxpayer’s financial circumstances (usually lasts about two years) 

Do you have questions about this blog or other tax services or IRS related issues topics? Please contact the tax team or IRS Defense Service Manager Naveid Jahansouz at 972-818-5300.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

Topics: IRS, COVID-19, Tax Relief, Taxpayer First Initiative