The IRS recently announced a new program, the Taxpayer Relief Initiative, to help taxpayers who are unable to pay their taxes because of the pandemic.
Taxpayers who owe taxes and could not pay have always had options such as installment agreements and offers in compromise, but now they have more options. (IRC-2020-248)
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The highlights of the Taxpayer Relief Initiative, according to the IRS:
- Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of the usual 120 days.
- The IRS says it will offer more flexibility for 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 for individuals and for business taxpayers who have gone out of business. This will occur instead of having taxpayers default on their agreements.
- 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.
- Some individual taxpayers who owe only 2019 taxes and owe less than $250,000 may qualify to set up an installment agreement without having a Notice of Federal Tax Lien filed by the IRS.
- 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.
- Taxpayers who cannot pay can contact the IRS to request a temporary halt in collection efforts, which the IRS will grant if the taxpayer is currently unable to pay.
Unfortunately, navigating through the various guidelines can be confusing and IRS instructions are next to impossible to decipher. While there are fees associated with hiring a tax professional, it may save you money and time.
“When you’re dealing with the IRS, it’s almost always worth it to get professional help from a tax attorney or enrolled agent. The same exact case and be accepted or denied by different IRS examiners — it’s all in the presentation.” said Michael McKeon , CEO of SoNerdly, a financial services comparison website for consumers.