IRS Expands Operations And Issues Additional Guidance In Response to Ever-Changing Pandemic Environment

On April 24, 2020, the Internal Revenue Service (IRS) issued an internal memo advising its employees that it would be recalling those employees involved in “mission critical” operations. This internal memo represents the most significant update to the IRS’s “People First Initiative,” a program intended to respond to the challenges of COVID-19 by providing a variety of relief related to IRS deadlines and collection actions. More detail regarding the People’s First Initiative can be found here.

To help ensure their employees’ safety, effective April 27, 2020, the IRS is requiring all individuals, employees, taxpayers, and related parties, to wear cloth face coverings while in IRS
facilities and work spaces.

The IRS has asked about 10,000 employees to return to work to perform “mission critical” operations, including opening mail, processing paper tax returns, and taking phone calls. Initially, that recall will be voluntary, with incentive pay being offered to those who are willing to risk returning to work at this time.

While the recall of about 1/7th of the IRS’s workforce does not return the IRS to anything resembling full capacity, it does mean that taxpayers and their representatives who have been waiting for the processing of paper returns or power of attorney forms, may finally see some progress on those fronts.

Aside from the recall of those IRS workers, the IRS also issued guidance on the deadlines for Foreign Account Tax Compliance Act (FATCA) data and certifications. FATCA-related data from foreign jurisdictions is now due to the United States by December 31, 2020. FATCA certifications that were going to be initially due on July 1, 2020 are now due by December 15, 2020.

Lastly, the IRS clarified the extension of deadlines relating to filing petitions in United States Tax Court (Court). The Court has been closed due to COVID-19 since the middle of March of 2020. The Court also cancelled April of 2020 sessions because of the on-going pandemic. In IRS Notice 2020-23, which is discussed in more detail here, the IRS extended due dates for items falling due between April 1, 2020 and July 14, 2020 to July 15, 2020. This included filings with the Court.

The clarification the IRS added to its Frequently Asked Questions (FAQ) section related specifically to the Guralnik v. Comm’r, 146 T.C. 230 (2016) case, which applied Federal Rule of Civil Procedure 6(a)(3)(A) to allow a taxpayer to late-file a petition with the Court as a result of the Court being closed due to a snow emergency.

In light of this additional FAQ, if a taxpayer was supposed to file a petition by March 19, 2020, after the Court was closed, that taxpayer would use the combination of the Guralnik decision IRS Notice 2020-23 to file their petition, in a timely manner, by July 15, 2020. If the Court does not reopen by July 15, 2020, then IRS Notice 2020-23 does not apply because Guralnik will provide the taxpayer with even more time to file. Though, if you have a petition due in the next two months, we recommend working with a tax professional to file that petition in a timely manner.