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Many Tax Payments Postponed Due to COVID-19 Resume on July 15

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

In a News Release, IRS has reminded taxpayers who took advantage of the People First Initiative tax relief and did not make previously-owed tax payments between March 25 to July 15, that they will need to restart their payments on July 15.

Background.

On March 25, 2020, IRS announced the People First Initiative in response to the COVID-19 crisis. It provides relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions. For example, the People First Initiative provided relief with respect to installment agreements (see IRS answers frequently asked questions about suspended installment payments) and offers in compromise (see IRS instructs taxpayers on COVID-19 effects on offers in compromise).

IRS reminder.

Here is what IRS says that taxpayers should do to resume their payment agreements to IRS, including installment agreements, offers in compromise, and Private Debt Collection program payments:

Installment agreements.  Taxpayers who suspended their installment agreement payments between April 1 and July 15, 2020 will need to resume their payments by their first monthly payment due date after July 15. IRS didn’t default their agreement, but interest did accrue, and the balance remained.

Taxpayers who had their bank suspend direct debit payments should contact the bank immediately to ensure their first monthly payment due on or after July 15, 2020 is sent ontime to avoid penalties.

If a taxpayer can’t meet their current installment agreement terms due to a COVID-19-related hardship, they can revise the agreement on IRS.gov/paymentplan or call the customer service number on their IRS notice if they have a Direct Debit installment agreement (DDIA).

Offers in compromise.  If IRS is currently reviewing a taxpayer’s submitted offer but hasn’t accepted it yet, the taxpayer should resume their required payments starting July 15, 2020. IRS will amend the taxpayer’s offer to allow them to pay any skipped payments at the end of the offer period, if the offer is accepted.

If a taxpayer has an offer in compromise agreement, and the taxpayer was unable to make the payments on their accepted offer because of a COVID-19 hardship, the taxpayer should resume payments and make up the missed payments by July 15, 2020. If the taxpayer is unable to make up the missed payments, he can contact the number on the IRS notice to discuss his situation.

Private debt collection. IRS did not forward new delinquent accounts to Private Collection Agencies (PCAs) from April 1 through July 15, 2020, and PCA interaction with taxpayers was limited to inbound telephone calls unless requested by a taxpayer in a voicemail or correspondence.

Taxpayers who had their PCA payments on hold should resume payments by July 15. IRS encourages taxpayers to work with their assigned PCA to establish a new payment arrangement or restructure an existing one based on their current situation.

Taxpayers who owe but can’t pay. Taxpayers who are experiencing a hardship or who have questions about their payments should call the customer service number provided on their notice but be mindful that wait times could be long. Phone lines remain extremely busy as IRS resumes operations. Taxpayers also have a variety of options through IRS.gov/payments to make one time or recurring payments without having to contact IRS.

To continue your research on offers in compromise, see FTC 2d/FIN ¶T-9601United States Tax Reporter ¶71,224.01.

 

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