The Internal Revenue Service is making some changes in its collection program to lessen the burden on taxpayers who owe outstanding tax debts and are trying to cope with the economic fallout of the COVID-19 pandemic.
The IRS said Monday that it’s making it easier to set up payment agreements and offers in compromise as part of a new Taxpayer Relief Initiative.
“The IRS understands that many taxpayers face challenges, and we’re working hard to help people facing issues paying their tax bills,” said IRS Commissioner Chuck Rettig in a statement. “Following up on our People First Initiative earlier this year, this next phase of our efforts will help with further taxpayer relief efforts.”
Paul is a partner in the Washington, D.C. office of Bracewell.� Paul’s career has intertwined with the SEC’s regulation of the municipal market from the very beginning, when as a young lawyer in the SEC’s Division of Enforcement he participated in preparing the SEC’s September 1977 and 1979 Staff Reports on New York City.� After practice as a securities, project finance, and bond lawyer in New York and Boston, �Paul returned to the SEC in 1994 to work for Chairman Levitt and serve as the first Director of the SEC’s Office of Municipal Securities. During that time, he participated in drafting the continuing disclosure amendments to Rule 15c2-12, oversaw SEC activity relating to Orange County California and advised the Commission on institution and settlement of over 100 enforcement actions in the municipal securities market.�Today, Paul defends states, local governments, and their officials, brokers, dealers, municipal securities dealers, municipal advisors, and their officers and employees, as well as individuals in investigations and enforcement proceedings by the SEC, Department of Justice, FINRA, and states Attorneys General.� Paul also serves as Counsel to a NRSRO, or Rating Agency, on regulatory and enforcement matters.� He advises clients on compliance with SEC and MSRB regulations, and corporate governance matters, conducts internal investigations, and serves as special disclosure counsel in securities transactions.Paul received the "Chairman's Award for Excellence" for his work in developing the amendments to Rule 15c2-12, while at the SEC, and received "The National Federation of Municipal Analysts�Industry Contribution Award" in 2001. Paul is listed in The Best Lawyers in America� in securities law, 2005 - 2010; in corporate governance and compliance law, 2006 -�2010;�and public finance law, 2005�- 2010.� Additionally, he is listed in Who's Who and What's What on Wall Street, Who's Who in America, Who's Who in American Law,The Lawdragon 500 Leading Lawyers in America 2005 edition, and Washington D.C. Super Lawyers 2007 for securities and corporate finance.Paul is frequently interviewed and quoted as an authority on securities regulation in international news media including The National, FTSE Global Markets, BBC News, The Business Times Singapore, and The Singapore American, as well as U.S. media, including The New York Times, The Wall Street Journal, Bloomberg News, the Associated Press, Reuters, and The Bond Buyer.
Jeff Curie is the President of Bitvore Corp., a provider of A.I.-based products that identify risk and opportunity for professionals in the municipal bond, banking and insurance industries.
Maikki Frisk is Mobey Forum's executive director.
Darren Guillot, the IRS Small Business/Self-Employed deputy commissioner for collection and operations support, discussed the new relief options in a new edition of the new IRS blog, “A Closer Look.”
“Earlier this year, we provided extensive relief and temporarily adjusted our processes to help people and businesses through our People First Initiative, which was in effect for the first months of COVID,” he wrote. “While it’s been important for us, and for the nation, to resume our critical tax compliance responsibilities, we continue to assess the wide-ranging impacts of COVID-19 and other difficulties people are experiencing.”
Under the new Taxpayer Relief Initiative, the IRS is offering several new forms of relief:
- Taxpayers who qualify for a short-term payment plan option now have up to 180 days to resolve their tax liabilities, instead of 120 days.
- The IRS is providing 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, for individual and out-of-business taxpayers, as opposed to automatically defaulting the agreement, which can complicate matters for those trying to pay their taxes.
- Some qualified individual taxpayers who owe less than $250,000 can set up installment agreements with the IRS without providing a financial statement or substantiation if their monthly payment proposal is enough.
- Some individual taxpayers who only owe outstanding taxes for the 2019 tax year and who owe less than $250,000 can qualify to set up an installment agreement without a tax lien notice filed by the IRS.
- Qualified taxpayers who already have an existing direct debit installment agreement with the IRS can now use the Online Payment Agreement system to propose lower monthly payment amounts and alter their payment due dates.
The IRS offers options for short-term and long-term payment plans, including installment agreements via the Online Payment Agreement system. The service is mainly available to people who owe $50,000 or less in combined income tax, penalties and interest, or to businesses that owe $25,000 or less combined that have filed all tax returns. The short-term payment plans can now be extended from 120 to 180 days for certain taxpayers.
The IRS has expanded its installment agreement options to get rid of the requirement for financial statements and substantiation in more circumstances for balances owed up to $250,000 if the monthly payment proposal is sufficient. The IRS also modified its installment agreement procedures to further limit the requirements for federal tax lien determinations for some taxpayers who only owe outstanding taxes for last year.
In addition to payment plans and installment agreements, taxpayers can also contact the IRS to ask for a temporary delay of the collection process. If the IRS decides a taxpayer is unable to pay, it can delay collection until the taxpayer's financial condition improves.
The IRS is now offering extra flexibility for some taxpayers who temporarily can’t meet the payment terms of an accepted offer in compromise.
To provide relief from tax penalties, the IRS is highlighting reasonable cause assistance 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.
Many taxpayers can apply through IRS.gov for some forms of relief, including installment agreements, without ever having to talk to a representative.
Other requests, including the new flexibility offered under the Taxpayer Relief Initiative, can be made by contacting the number on the taxpayer’s notice or responding in writing. However, when they ask for relief, the IRS said taxpayers need to be responsive when they receive a balance-due notice.
“If you’re having a tax issue, don’t go silent,” Guillot said in a statement. “Please don’t ignore the notice arriving in your mailbox. These problems don’t get better with time. We understand tax issues and know that dealing with the IRS can be intimidating, but our employees really are here to help.”
