April 2, 2020
3 tips to help manage tax debt
The Internal Revenue Service (IRS) recently announced measures aimed to help reduce taxpayers’ financial burden when it comes to their tax bills. These measures include:
Measure #1: Installment Agreements.
The agency has stated that it will suspend tax payments for those who have an existing installment agreement from April through July 14, 2020. Although the IRS will not default based on suspension of payments at this time, it is important for taxpayers to note interest will continue to accrue on the unpaid balance.
Measure #2: Offers in Compromise (OIC).
The IRS also states it will expand the period of time available for taxpayers who are currently in the OIC application process to provide requested information. In the past, a failure to respond promptly to such a request could result in a rejection. The agency has now extended the period of time through July 15, 2020.
The agency also notes those who have a current OIC can also suspend payments through July 15. Again, interest will continue to accrue on the unpaid balance.
Measure #3: Suspension of liens and private collection efforts.
The agency also states it will not act on new liens or levies to take away taxpayers’ property during this time period. It will also refrain from sending accounts to private collection agencies.
The agency also states in a recent newsletter that it will continue to examine taxpayers as “deemed necessary.” This means the agency could still pursue certain audit efforts. Those who receive notification of an audit are wise to seek legal counsel to better ensure their legal rights are protected.