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.