New IRS Relief for Taxpayers Experiencing COVID-related Difficulties

The IRS has announced new initiatives to help taxpayers experiencing Covid-related difficulties (which probably applies to most people) who have unpaid federal tax liabilities. Specifically, the IRS has announced the below relief:

·  The IRS is highlighting reasonable cause assistance available through IRS procedures for failure to file, failure to pay and failure to deposit penalties. First time abatement (FTA) relief is also available for the first time a taxpayer is subject to one or more of these tax penalties. The FTA program is one of the most under-utilized penalty abatement programs in the IRS.
 

·  For individual taxpayers receiving notices (letters about a tax bill) with tax liabilities up to $250,000 for Tax Year 2019 only, the IRS can offer one Installment Agreement opportunity with no lien filed.
 

·  The IRS is extending the short-term payment plan timeframe to 180 days (normally 120 days).
 

·  The IRS is 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. This is a significant increase over the prior lower thresholds, which were $100,000.
 

·  Automatically include new tax year balances accrued in existing Installment Agreements. (Individuals and Out of Business entities only). This should help taxpayers avoid the administratively burdensome process of entering new installment agreements. Affected taxpayers should be able to roll a 2019 tax debt into a pre-existing installment agreement.
 

·  The IRS will provide relief for taxpayers having difficulty meeting the terms of previously accepted offers in compromise.