If you are like millions of Americans struggling with tax debt, the new Taxpayer Relief Initiative could provide you with much needed assistance.
The COVID-19 pandemic has undoubtedly caused economic uncertainty. The IRS knows this. As a result, it has implemented new procedures to help struggling taxpayers (see, the IRS is not all bad!). The Taxpayer Relief Initiative was implemented in late-2020 to make it easier to resolve certain tax debts with the IRS. This article addresses some of the key components of this initiative.
For more information on how the IRS Taxpayer Relief Initiative can help you, please contact our AV Rated law firm today. Porter Law Office, LLC specializes in resolving tax controversies for businesses and individuals.
What is the IRS Taxpayer Relief Initiative?
If you owe taxes to the IRS, you have always had options to get help. The IRS has collection alternatives, such as installments agreements and offers in compromise, to help you pay off your tax debts. These existing programs have stringent guidelines. The Taxpayer Relief Initiative relaxes these guidelines to make it easier to resolve your tax problems.
By way of background, the IRS announced the Taxpayer Relief Initiative in November 2020. It can be found here: IR-2020-248. This initiative was a follow-up to the People First Initiative, an enormously helpful measure created in the early days of the COVID-19 pandemic to help individuals who owed money to the IRS. The People First Initiative expired in July 2020. Accordingly, the IRS created the Taxpayer Relief Initiative to expand and extend various tax relief options.
The Taxpayer Relief Initiative helps struggling taxpayers in a number of ways. Taxpayers can request a temporary suspension of collection activity if they do not have income or an ability to pay. This procedure is known as entering into currently not collectible status. The IRS also established more generous terms for getting into and modifying installment agreements. For example, if you are in a direct debit installment agreement (“DDIA”), or an online payment plan, you can propose lower monthly payments and update your payment date online. There are also penalty relief options including first-time abatement for reasonable cause.
Here are the key benefits under the IRS Taxpayer Relief Initiative:
- Extension of time to pay in full: If you simply need more time to pay, you can apply for an extension of time to pay for up to 180 days. Ordinarily, the IRS only allows 120 days to pay. The Taxpayer Relief Initiative increases that time to 180 days.
- OIC Flexibility: If you are in an approved offer in compromise, and you cannot make your payments, the IRS is providing flexibility. You should contact the IRS (yourself or with the assistance of counsel) if you have missed a payment. The IRS may temporarily suspend your payments until your financial situation improves.
- Installment Agreement – New Balances: Before the pandemic, the IRS would revoke an installment agreement if you accrued a new balance or missed a payment. Now, the IRS may automatically add new tax balances to your installment agreement. If you miss a payment, the IRS can now simply add these to your existing agreement. If you are having difficulties paying your installment agreement, it is best to be proactive. Contact the IRS and discuss your situation.
- Easier Installment Agreement Approvals: If you owe less than $250,000, the IRS can now approve an installment agreement without financials. You may not have to provide a detailed financial statement (Form 433-A) if your monthly payment proposal is sufficient. Your case cannot be assigned to a revenue officer to qualify.
- Tax Debt for 2019: The IRS is also providing relief to taxpayers who owe less than $250,000 for the 2019 tax year only. The IRS may approve an installment agreement for you without filing a federal tax lien. No lien filings can be a major benefit to your credit score.
- Simplified Procedure to Modify Existing Payment Plans: If you have an existing DDIA, you may be able to use the IRS’s Online Payment Agreement system to propose a lower monthly payment or change your payment due dates.
- Relief from Penalties: The IRS is also reminding people to seek out penalty abatement based on reasonable cause for taxpayers with failure to file, pay and/or deposit penalties. First-time penalty abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.
How to get help?
To get help, you can call the number on your notice or respond to the IRS in writing. It is important not to ignore IRS notices. The new initiatives are short-term. If you wait and ignore your tax notices, you may find yourself in a more difficult position. IRS problems do not get better with time. If you are intimidated by the IRS, contact an experienced tax lawyer to help you resolve your issue.
Contact an Experienced Columbus, Ohio Tax Attorney
IRS Debt Settlement Lawyer | Gahanna, Ohio
If you have questions about your tax debt or the IRS’s Taxpayer Relief Initiative, contact the experienced Columbus, Ohio tax lawyer at Porter Law Office, LLC today for a case evaluation. With an advanced degree in taxation, Mr. Porter can help you understand your options to deal with the IRS in this economically uncertain time. Contact us today.