As a CPA, tax professional, or enrolled agent, you know how important it is to stay on top of IRS tax deadlines. With the recent extension of the IRS tax deadline due to COVID-19, it’s more important than ever to make sure your clients are aware of the changes and how they can take advantage of them. Here are five things you can do to help your clients navigate the extended IRS tax deadline:
What the IRS Has Changed
The new filing deadline, July 15th, has become the date to watch for IRS extensions in three major areas that might affect your clients who owe back taxes.
Installment Agreements: Payments on all installment agreements are suspended until July 15th, which means your clients can skip their next few payments without defaulting their agreement. That goes for your clients who are making direct debit payments as well, but with a caveat.
Because the IRS communication lines are so inundated and getting through to an actual agent can be impossible, the IRS is encouraging people to stop those debit payments at their bank—an action that can cost your client anywhere from $15 to $35 per transaction. And stopping payments doesn’t stop interest from accruing on your clients’ accounts. For every month they skip, more interest is added to their bottom line. It’s also important that clients mark their calendars and remember to call their banks to resume payments again in advance of July 15th. (2 weeks prior is suggested.)
Offers in Compromise: Your clients can also suspend any Offer in Compromise payments until July. If you have any pending offers in your queue, you have until July 15th to file additional paperwork. And your clients who failed to file a return for 2018 have until the new deadline to file without defaulting their offer.
Collections: Field collection activities, including all liens, levies, and property seizures, are suspended until July 15th. Newly delinquent accounts will not be forwarded to private collections during this period.
Some additional changes to note:
- If your clients make estimated tax payments, their first payment has been pushed to July, but their second payment is still due June 15th. (Yes, you read that correctly.)
- Appeals cases are still being worked through video and phone conferencing, so your clients need to provide requested paperwork as soon as possible.
- The IRS is going to be focused on cases that might be coming up against a statute of limitations during this time, so if that applies to any of your clients, you’ll want to prioritize them.
Take a Proactive Approach Toward the IRS Tax Deadline
The changes to an IRS tax deadline don’t solve your clients’ tax problems, but they do present opportunities to help your clients.
- Reach out. Communication with your clients is vital right now. A few words from you can make them feel less alone as they face down financial uncertainties and a constantly changing future landscape. Let them know what relief is available to them and that you’re ready to help.
- Play catch-up. With everything on hold, this is a great time to encourage your clients to file their old returns, if they haven’t already—especially those clients who might have given up in the face of the consequences they were facing. You can give them some hope, some time to catch-up, and a practical way out.
- Gather your documents. With all of the previous deadlines being put on hold for three months, now is the time to get your clients to go through their old boxes and files. Take advantage of the IRS’ willingness to accept additional documentation on pending Offers in Compromise and Installment Agreements and give your clients their best shot at making a deal that works for them.
- Be prepared. The IRS will most likely be inundated when the new deadline hits. You can break through the flood of filings and requests by using all the tools at your disposal to make sure your paperwork is in order and ready to go. Doing your prep now can make sure you’re the best advocate you can be for your clients when business resumes.
- Stay calm. You’re probably feeling as overwhelmed as everyone. But if you can be the voice of reason and focus on practical solutions, that will make all the difference. And you’re not alone. IRS Solutions has prepared some fantastic new resources to help you through the crisis.
How IRS Solutions Can Help
Our members-only Marketing Toolbox includes a COVID-19 Resource Package to provide you with all the materials you need to reach out. Utilize the template emails and other marketing resources to make sure the people who need your help can find you. And, if we can assist you in any other ways, please reach out. We are here to help.
