IRS Eases Enforcement Efforts During Coronavirus Pandemic

Due to the coronavirus (COVID-19) pandemic, times are tough. So tough that the IRS has decided to go easy on American taxpayers—at least temporarily. It has announced a new "People First Initiative," which is a sweeping series of steps designed to make life easier on people facing tax issues.

Here’s what the IRS is going to do, and not do:

Suspension of Payments on Existing Installment Agreements

Hundreds of thousands of taxpayers have already entered into installment agreements with the IRS. In these agreements, people agree to pay unpaid and overdue taxes over a period of time. The IRS is suspending the requirement that taxpayers make their payments under these agreements during April 1, 2020 through July 15, 2020. However, interest will continue to accrue on the amount owed. Taxpayers who have their payments to the IRS made by direct deposit may also suspend their payments. Any taxpayers who wish to continue to make their payments are free to do so.

New Installment Agreements Will be Processed

The IRS is reminding taxpayers that if they owe taxes and can’t pay, they can still enter into a new installment agreement with the IRS. You can apply online. For details, see the IRS Apply Online for a Payment Plan web page.

Offers In Compromise

Taxpayers who can’t afford to pay the IRS the taxes they owe can enter into an offer in compromise (OIC), in which the IRS accepts payment of less than the full amount owed. Taxpayers need to file a lengthy OIC application disclosing their financial situation. The IRS is continuing to accept and process OIC applications. For details, see the Offers in Compromise page on the IRS website.

The IRS is allowing taxpayers until July 15 to provide any additional information by the IRS to support pending OIC applications. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.

Taxpayers with accepted OICs have the option of suspending all payments until July 15, 2020. But interest will continue to accrue on any unpaid balances.

Field Collection Activities Suspended

IRS liens and levies (including any seizures of personal residences) begun by field revenue officers will be suspended from April 1, 2020 through July 15, 2020. However, field revenue officers will continue to go after high-income nonfilers—they are taxpayers who earn over $100,000 and don’t file returns.

No Automated Liens and Levies

Most IRS liens and levies are initiated automatically by IRS computers. The IRS is suspending these during April 1, 2020 through July 15, 2020.

No Passport Certifications to the State Department

Taxpayers who are seriously delinquent in their taxes can have their passports suspended by the State Department. This process begins when the IRS files a certification with the State Department that a taxpayer is “seriously delinquent.” The IRS will not file such certifications starting April 1, 2020 through July 15, 2020. The IRS encourages such taxpayers to submit a request for an Installment Agreement or OIC during this period.

No New Private Debt Collection

New delinquent accounts will not be forwarded by the IRS to private collection agencies for collection starting April 1, 2020 through July 15, 2020.

Limits on Audits

From April 1, 2020 through July 15, 2020, the IRS will not start, in general, new field, office, or correspondence audits. It may start new examinations or issue notices of deficiency where the statute of limitations is running out. IRS auditors will not meet in person with taxpayers during this time period.

Cases on Appeal

The IRS Office of Appeals’ employees will continue to work their cases. The Office of Appeals is not currently holding in person conferences with taxpayers. Conferences may be held over the telephone or by videoconference.

Earned Income Tax Credit and Wage Verification Reviews

Millions of low income taxpayers who work qualify for the earned income tax credit. The IRS says that taxpayers have until July 15, 2020 to respond to the IRS to verify that they qualify for this credit or to verify their income. Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information.

Non-Filers Should File

The IRS says that if you haven’t filed a tax return for 2018 or earlier years, you should do so now. More than one million households that haven’t filed tax returns during the last three years are actually owed refunds; they still have time to file their returns and claim these refunds.

If you owe the IRS money for past years, you should file a return for the years involved and seek to enter into an installment agreement or an offer in compromise with the IRS to obtain a “fresh start.” See the IRS website for more information.