COVID-19 continues to make life difficult for taxpayers throughout the country. In response, the Internal Revenue Service (IRS) recently published a notice outlining new relief options for taxpayers who are struggling due to COVID-19. The agency is also encouraging taxpayers to promptly reply to notifications from the agency.

Is this the first time the IRS has responded to the coronavirus?

No. The agency has already provided some relief through the People First Initiative. However, the IRS recognizes that many of the issue’s taxpayers faced at the beginning of the pandemic have only grown in recent months. Furthermore, many of these issues are out of their control. Problems with the mail service have led to delays that may result in fines and penalties while many faces financial difficulty due to job loss. As such, the agency has announced the following, additional steps to help aid taxpayers impacted by the current pandemic:

  • Abating penalties. The agency may forgive penalties that are the result of accusations the taxpayer failed to file or failed to pay their tax obligations.
  • Extending payment plans. Many short-term payment plans will shift from the current 120 days to 180 days.
  • Expanding installment agreements. The agency is set to remove the financial verification requirement for qualifying cases. To qualify, the taxpayer must generally owe less than $250,000 and not have a revenue officer assigned to the case. Taxpayers will also have the ability to include new tax year balances in these agreements.
  • Relief from tax debt. The agency may also provide additional relief to those who have a previously accepted offer and are having difficulty meeting the agreement.

But one of the BIGGEST changes is set to change up the IRS payment plan game entirely, and taxpayers should really look to take advantage of it:

  • Expanding installment agreements. The IRS is set to remove the financial verification requirement for qualifying cases. This means that taxpayers will NOT have to provide the normal voluminous financial information to qualify for fair payments plans. To qualify, the taxpayer must generally owe less than $250,000 and not have a revenue officer assigned to the case. Taxpayers will also have the ability to include new tax year balances in these agreements.

As noted by the federal agency, you do not have to “go it” alone. The attorneys at Goldburd McCone can help you get a fair payment plan quickly and have experience navigating these issues and can represent your interests, better ensuring a more favorable outcome.