Government agencies are making announcements about incentives to help people as we navigate the COVID-19 crisis. The Internal Revenue Service (IRS) recently unveiled its effort to help taxpayers, called the People First Initiative.
What is the People First Initiative?
IRS Commissioner Chuck Rettig states the initiative is an “unprecedented action” providing immediate relief for taxpayers facing “uncertainty over taxes.” Examples include:
- Suspension of liens and levies used to collect taxes.
- Reduction in audits.
- Relaxation of repayment requirements.
The IRS states the initiative will run from April 1, 2020 through July 15, 2020.
How can this initiative help with tax compliance?
The agency’s relaxation of repayment requirements can help taxpayers to get a “fresh start” when it comes to their tax obligations. Two examples discussed within the IRS’ news release include installment agreements and offers in compromise (OIC). The installment agreement option allows for monthly payments instead of a lump sum to pay off a tax bill, but the OIC may be a more enticing option. This option allows the taxpayer to pay off a tax bill for less then is actually owed.
Should I consider voluntary disclosure?
In general, voluntary disclosure is encouraged. Those who choose voluntary disclosure are much less likely to face criminal prosecution for tax crimes. The new incentives released by the IRS provide additional encouragement — not only could taxpayers come into compliance with a reduced chance of criminal prosecution, but they could also end up paying less to settle their debt.
The details will depend on each individual taxpayer’s situation. As a result, it is wise to seek legal counsel before moving forward. The attorneys at Goldburd McCone are familiar with tax compliance options and can discuss how they would impact your specific situation.
