TAXING MATTERS
T . MARK RUSH , CPA
Partner Ham , Langston & Brezina , LLP
Taxpayer Relief Initiative aims to help those financially affected by COVID-19
The IRS reviewed its collection activities
to see how it could provide relief for taxpayers , both Individuals as well as Company ’ s who owe taxes but are struggling financially because of the pandemic . The agency is expanding taxpayer options for making payments and other ways to resolve tax debt .
Taxpayers who owe taxes always had options to get help through payment plans and other tools from the IRS . The new IRS Taxpayer Relief Initiative is expanding on those tools .
These revised COVID-related collection procedures will be helpful to taxpayers , especially those who have a record of filing their returns and paying their taxes on time .
Here are the highlights of the Taxpayer Relief Initiative :
• Taxpayers who qualify for a short-term payment plan may now have up to 180 days to resolve their tax liabilities instead of 120 days .
• The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise .
• The IRS will automatically add certain new tax balances to existing Installment Agreements , for individual and business taxpayers who have gone out of business .
• Certain qualified individual taxpayers who owe less than $ 250,000 may set up Installment Agreements without providing a financial statement if their monthly payment proposal is sufficient .
• Some individual taxpayers who only owe for the 2019 tax year and owe less than $ 250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS .
• Qualified taxpayers with existing Direct Debit Installment Agreements may be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates .
Additional tools to assist taxpayers who owe taxes :
Temporarily delaying collection — Taxpayers can contact the IRS to request a temporary delay of the collection process . If the IRS determines a taxpayer is unable to pay , it may delay collection until the taxpayer ’ s financial condition improves .
Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise . To help determine eligibility , use the Offer in Compromise Pre-Qualifier tool . Now , the IRS is offering additional flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted offer in compromise .
Relief from penalties — Reasonable cause assistance is available for taxpayers with failure to file , pay and 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 .
Many taxpayers requesting payment plans , including installment agreements , can apply through IRS . gov . These types of relief are not automatic . Taxpayers need to request payment relief by contacting the number on their balance due notice or responding in writing .
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