The Internal Revenue Service (IRS) announced on Monday, November 02, 2020 a number of changes designed to help struggling taxpayers impacted by COVID-19 more easily settle their tax debts with the IRS with IR-2020-248.

This so-called “Taxpayer Relief Initiative” is for taxpayers who owe tax liabilities but are struggling financially because of the pandemic, expanding taxpayer options for making payments and alternatives to resolve balances owed.

Taxpayers who owe always had options to seek help through payment plans and other collection alternatives, but the new initiative is expanding on those existing tools even more.

Some of the highlights of the initiative are:

• Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days.
• The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
• The IRS will automatically add certain new tax balances to existing Installment Agreements instead of defaulting the agreement which can complicate matters for those trying to pay their taxes.
• Certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient to fully pay their debt before it becomes unenforceable. 
• Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
• Additionally, qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

In addition to payment plans, the IRS may approve other alternatives to taxpayers to resolve their collection issues, including:

• Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves.
• Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise.
• The IRS is highlighting reasonable cause assistance available for taxpayers with failure to file, pay and deposit penalties. First-time penalty abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.

If you are having difficulties with your tax obligations such as filing past-year returns, examinations, or debt you are having trouble paying, call our office at 713-333-0555. We are experts in everything tax-related and are one of Houston’s premier tax-focused law firms.