COVID-19 relief for struggling taxpayers

Your Guide to State, Local, Federal, Estate + International Taxation

You do not need to read this article to know that COVID-19 has made life extremely difficult for a vast number of people. The impact of the pandemic may have made it hard if not impossible at the moment to satisfy your tax obligations. The IRS knows this too and recently announced new collection procedures aimed at assisting taxpayers through their Taxpayer Relief Initiative.

Don’t miss: FinCEN creates confusion over FBAR filing

Taxpayers who previously requested a short-term payment plan of 120 days may now have up to 180 days to resolve their tax liabilities. If you have an existing installment agreement the IRS will automatically add to your existing installment agreement new tax year balances. Prior to the initiative you would need to renegotiate with the IRS to achieve this. If you are a taxpayer and owe less than $250,000 and meet certain qualifying standards an installment agreement may be set up without providing a financial statement or substantiation if your monthly proposal is sufficient. A debt of less than $250,000 related to the 2019 tax year may qualify for an installment agreement without notice of a federal tax lien filed by the IRS. Changes in dates and payment amounts may also be initiated online for qualifying taxpayers with existing direct debit installment agreements. There may also be help as it relates to penalties for failure to file, failure to pay and failure to deposit penalties as first-time abatement relief may be available for the taxpayer.

There are several key takeaways from the relief that is being extended by the IRS to taxpayers who are struggling. If you are a taxpayer who has a record of filing your return and paying your taxes on time the relief measures are especially designed to assist you. The measures included often refer to a qualified taxpayer. Consultation with your Henry+Horne tax professional as to your status as a qualified taxpayer and relief measures available to you is imperative. Most important of all is do not ignore your notice. I have never known anyone who relished receiving a notice from the IRS. If you have an issue with unpaid taxes and receive a notice the situation will not resolve itself by not opening and dealing with the notice. Be wary of solicitations from businesses you are not knowledgeable about and who claim and, in some situations, guarantee that they can make your tax debt disappear like magic. I wish it were that easy, but reality says otherwise.

I know it may be hard to believe but the IRS really does want to provide you with assistance during these difficult times. Your Henry+Horne tax professional always has your best interests in mind and will work with you to reach a solution that helps you sleep just a little better at night.

If you need assistance, contact your Henry+Horne tax professional for more details.  For more information and resources on COVID-19, see our coronavirus page.

Cheryl Dickerson, CPA