On Monday, the Internal Revenue Service (IRS) announced several new changes that are designed to help taxpayers who are impacted by COVID-19 and struggling to pay their tax debt. The new IRS Taxpayer Relief Initiative will expand existing tools and help more taxpayers find tax relief.
“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.”
Highlights of the Taxpayer Relief Initiative
The revised COVID-related collection procedures will be beneficial to taxpayers, especially those who have always filed and/or paid their taxes on time. Here is a brief rundown of the new measures included in the Taxpayer Relief Initiative:
- Short-term payment plan repayment will go from 120 days to 180 days for those who qualify
- More flexibility taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise
- Individuals and out of business taxpayers may have certain new tax balances added to their existing payment plans and avoid default
- Qualified taxpayers who owe less than $250,000 may be allowed to set up an installment agreement without providing a financial statement if their monthly payment proposal is sufficient
- Certain taxpayers who still owe their 2019 taxes (less than $250,000) may be eligible to set up a payment plan without a notice of federal tax lien filed by the IRS
- Qualified taxpayers with an existing Direct Debit Installment Agreement may be able to use the Online Payment Agreement system to propose lower monthly payments or change their due dates
Other Tax Relief Available
In addition to the expanded tax relief measures outlined in the Taxpayer Relief Initiative above, taxpayers can still get help with their tax debt through the following programs.
Temporary Collection Delay – Taxpayers who are unable to pay due to hardship may have collections efforts temporarily suspended through what is known as a “Currently Not Collectible” status.
Offer in Compromise – Some taxpayers may be eligible to have their IRS tax debt settled for less than they owe by submitting an Offer in Compromise. The IRS is offering more flexibility for those who qualify but may be temporarily unable to meet the payment terms.
Penalty Relief – The IRS offers first-time penalty abatement relief to those who have never filed late or missed a payment in previous tax years. In addition, they are providing reasonable cause assistance for failure to file, pay, and deposit penalties.
Now, more than ever, the IRS is making it easier for taxpayers to tackle their tax debt. If you owe the IRS, schedule a free consultation with Tax Defense Network and explore your available options. Our licensed tax professionals can help stop IRS collection actions, set up a payment plan, or submit an Offer in Compromise.