IRS Gives Taxpayers More Flexibility with Tax Debts

Due to the economic fallout caused by COVID-19, the IRS is making changes to its tax collection program. This change will allow taxpayers with outstanding tax debts more room to relax as they are coping with financial burdens. Some changes that the IRS has implemented are making the set-up process for payment agreements easier; and allowing compromises as a part of a new Taxpayer Relief Initiative. In addition to easier payment agreements, the IRS has also implemented a new system called SafeSend Returns. This program allows the IRS to assemble, securely deliver, and collect e-signatures from taxpayers from anywhere.

Other forms of relief that the IRS is offering consist of:

  • Taxpayers that qualify for a short-term payment plan option have 180 days to resolve their tax liabilities rather than 120 days.
  • Flexibility for taxpayers who are temporarily unable to meet the payment terms of an accepted offer in compromise.
  • Automatically adding new tax balances to existing installment agreements, for individuals and out-of-business taxpayers, instead of defaulting the agreement.
  • Qualified individual taxpayers that owe less than $250,000 can set up installment agreements with the IRS without a financial statement or substantiation, as long as their monthly payment proposal is enough.
  • Individual taxpayers who only owe outstanding taxes for 2019 and owe less than $250,000 can qualify to set up an installment agreement without a tax lien noticed filled by the IRS.
  • Qualified taxpayers who have an existing direct debit installment agreement with the IRS can use the Online Payment Agreement system for a lower monthly payment amount and alter payment due dates

The IRS offers options for short- and long-term payment plans, which include installment agreements via the Online Payment Agreement system. This service is available to people who owe $50,000 or less in income tax, penalties and interest; or to businesses that owe $25,000 or less combined, who have filed all tax returns as well. In addition to these payment plans and installment agreements, taxpayers can also contact the IRS for a temporary delay of the collection process.

The IRS is also highlighting reasonable cause assistance for taxpayers who fail to file, pay and deposit penalties, as a way to provide relief from these penalties. For first-time relief of these tax penalties, the IRS offers taxpayers penalty abetment relief. Taxpayers may apply for forms of relief without talking to a representative through the IRS website

Talley’s experienced team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on the assets and wealth to the next generation. We welcome opportunity to discuss current options available for you. For more information, contact us today.