Just like businesses, individuals and local government entities across the nation, the IRS is also taking steps to protect its employees, taxpayers and partners. On March 25, 2020 the IRS unveiled the new People First Initiative to help taxpayers facing COVID-19 challenges. According to IRS Commissioner Chuck Rettig, it provides immediate relief to help people facing uncertainty over taxes and temporarily adjusts IRS processes to help people and businesses during these uncertain times. Rettig added, “We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.”
Specifics about the provisions of the initiative will be released soon. However, highlights include:
1. Installment Agreements
Payments due on existing installment agreements between April 1 and July 15, 2020 are suspended. If taxpayers are unable to comply with the terms of a regular or direct debit installment agreement, they may suspend payments during this period. In addition, taxpayers can still set up new installment agreements online or over the telephone.
2. Offers in Compromise (OIC)
- IRS will allow an extension until July 15 to provide additional information in support of a pending offer. No pending OICs will be closed before July 15 without the taxpayer’s consent.
- Taxpayers have the option to suspend all payments on accepted OICs until July 15, though interest will continue to accrue.
- IRS will not default an OIC for taxpayers who are delinquent in filing their 2018 tax return, so long as the 2018 return (and the 2019 return) is filed by July 15.
- New OIC submissions can still be submitted.
3. Field Collection Activities
- Liens and levies initiated by field revenue officers will be suspended for most taxpayers.
- Revenue officers will continue to pursue high-income non-filers and will perform other similar activities where warranted.
4. Field, Office and Correspondence Audits
- IRS will generally not start new field, office or correspondence audits during this period, unless necessary to preserve the applicable statute of limitations.
- In-person meetings on current field, office and correspondence audits will be suspended. However, audits will be continued remotely.
5. Practitioner Priority Service
Telephone service is available but longer wait times may result from limitations on staffing levels.
6. Responses
Responses to taxpayer correspondence will be very limited. The IRS advises that taxpayers who mail correspondence to the IRS should expect to wait longer for a response. The IRS anticipates that delayed responses will continue after return to normal operations due to correspondence backlog.
7. IRS Office of Chief Counsel
Chief counsel will continue to work to resolve cases in litigation, and will continue to support and advise IRS operating divisions on examinations and collection matters.
8. IRS Independent Office of Appeals
Staff will continue to work cases. Conferences will be held via telephone or video conferencing. Taxpayers should respond promptly to requests for information.
9. Taxpayer Advocate Service
The service will be open to take calls and work cases, but walk-in service is unavailable. NOTE – if calling in to TAS, taxpayers and representatives need to use the local numbers. The toll-free centralized number is unavailable until further notice.
The IRS plans to monitor issues relating to COVID-19 and will make changes to its operations and functions as appropriate. Varnum’s Tax Team will provide updates on IRS operations, functions and procedures as they evolve.