IRS Offers Additional Taxpayer Relief in Response to Covid-19

On March 25, 2020, the Internal Revenue Service (IRS) released guidance related to its “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 (for more information on the IRS’s People First Initiative, please see our previous blog articles here and here.

On November 2, 2020, the IRS indicated that it would provide additional relief initiatives in light of the ongoing Covid-19 pandemic. These initiatives include:

• Highlighting reasonable cause assistance available through IRS procedures for failure to file, failure to pay, and failure to deposit penalties. First time abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.

• For individual taxpayers receiving notices with tax liabilities up to $250,000 for the 2019 tax year only, the IRS can offer one Installment Agreement opportunity with no lien filed.

• Extending the short-term payment plan timeframe to 180 days (normally 120 days).

• Easing paperwork requirements to allow individuals more flexibility to get non-streamlined Installment Agreements up to $250,000 without financial verification, if their case is not yet assigned to a revenue officer.

• Extending guidance to automatically include new tax year balances accrued in existing Installment Agreements (for Individuals and Out of Business entities only)

• Providing relief for taxpayers having difficulty meeting the terms of previously accepted Offer In Compromise.