IRS easing some enforcement action during COVID-19 outbreak

The IRS has launched its new People First Initiative to ease tax-related pressure for some taxpayers through at least July 15, 2020.

The IRS announced on March 25, 2020, that it will immediately provide relief to some American individuals and businesses mainly by temporarily freezing certain of its enforcement activities and extending certain deadlines. It has dubbed the effort its People First Initiative.

As a general matter, the agency has pledged to minimize any face-to-face interaction between its personnel and taxpayers to diminish exposure to the coronavirus.

Some of the taxpayer relief in the initiative includes:

• Installment agreements: Payments due from April 1 to July 15, 2020, under these repayment plans for past-due tax debt will be suspended for taxpayers in financial distress.
• Offers in compromise (OIC): For these settlement agreements in which the IRS has agreed to accept less than the total amount of tax due, the agency is offering payment suspension during the initiative. The IRS will not unilaterally close an OIC application before July 15 and will accept requested information on an OIC request through that date. The agency will refrain from declaring an OIC in default for the taxpayer’s failure to file their 2018 tax return but urges the delinquent returns from 2018 and 2019 to be filed by July 15.
• Collection activities: The IRS will suspend both automated and field revenue officer-initiated liens and levies. This includes suspension of personal residence seizures. One exception is that certain “high-income non-filers” may still be targeted.
• State department passport certifications: The IRS will suspend during the initiative certifying to the Department of State the identity of certain seriously delinquent taxpayers for the purpose of passport suspension.
• Private debt collector referrals: During this time the agency will make no new referrals to private collection agencies.
• Audits: While audits already underway may be continued, new examinations will generally not be initiated, with some exception.
• Earned income tax credit (EITC) review and wage verification: The agency will extend the time to respond to requests for information related to EITC qualification and proof of income.

The agency, however, will take the action it needs to in order to preserve its right to pursue tax assessment and collection when the statute of limitations (legal filing deadline) is about to run. It will try to postpone taking such actions until after July 15, if possible.

During the initiative, the IRS urges taxpayers to take steps to resolve tax-related issues, if they are able, including entering into new installment agreements.

The IRS says it might modify or extend the program if appropriate.