November 23, 2020

IRS Taxpayer Relief Initiative Due to COVID-19


IRS has expanded its tax collection tools in light of the financial difficulties taxpayers may have in paying their tax obligations.

       You can ask the IRS to temporarily delay collection for a short time frame until conditions improve. For example: you could be expecting a bonus, asset sale, inheritance or other event that will generate funds to pay the IRS.

       Short term payment plans are extended from 120 to 180 days – Online payment agreement plan where you can pay your tax liability within 180 days; penalties and interest apply but penalties can be waived for first time abatement or reasonable cause.

       Payment amounts on the initial Online Payment Agreement can be reduced and the dates can be changed – formerly not available.

       Installment Agreements for those owing $250,000 or less that cannot pay within 180 days can be set up without providing a financial statement or waiting for the official IRS notice.  This was formerly available only to those with up to $25,000 tax liability for individuals and $10,000 for businesses.  You could not apply until after receipt of formal notification from the IRS of unpaid taxes.

       IRS will automatically add additional tax balances to existing Installment Agreements for individuals or businesses without having to re-apply.

       Offer in Compromise flexibility in payment terms; however, you cannot be in bankruptcy proceedings and you still need to be up-to-date with any tax return filings and payments including estimated tax payments before filing for an Offer in Compromise.

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