IRS Tax Debt Relief During COVID-19 Is Made Easier With the People’s First Initiative.
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My name is Drew Foster and I just wanted to do a quick little video on the IRS’s new initiative about COVID-19 and how your clients can get some peace of mind about their installment agreements and not have to pay those for the next couple of months.
On March 25th, the IRS announced what was called the People’s First Initiative for COVID-19. What that did was a bunch of things as far as collections and audits go. It sort of spelled out what the IRS is going to do at this time; if they are going to come out and levy you, if they are going to lien you, what they are going to do. Basically, they suspended almost everything. It was a really good thing for taxpayers. I think it was a little unfair in this uncertainty to have to worry about that one little thing of paying their taxes or back taxes.
I’m just going to jump right in. For installment agreements on COVID-19, the taxpayers that have a current installment agreement and are making their payments by check, those payments are suspended and they don’t have to make a payment between April 1st and July 15th. So, if their payment falls after the 15th, or like July 16th for say, they will have to make that payment as of today.
Things have been changing rapidly, we don’t know what’s going to happen. Of course, we just wanted to get this information out there because we had a ton of questions from our clients and I can imagine your clients as well have been asking. So, if they pay by check, they don’t have to send it. The one caveat out there is that the interest will continue to accrue. It’s by law and the IRS can’t do anything about that.
The second issue is Direct Debit Installment Agreements. A lot of clients are concerned about this because they don’t have a way to call the IRS. The IRS isn’t even answering the practitioner priority line right now because everybody is at home. In the case of Direct Debit Installment Agreements, those payments will continue unless the taxpayer requests them to be suspended. So, being that the IRS is not there and there’s nobody answering, what they have recommended is they have said the IRS isn’t going to default them, but they have to request it and since the IRS isn’t there, what they are going to need to do is they are actually going to need to call their bank and stop payment on the direct debit payment temporarily. Temporarily is between these dates of April 1st and July 15th.
If their payment is due on July 16th, they will need to call at least 2 weeks in advance to request that stop payment be removed and that they allow that direct debit to go through, in case the IRS tries to get their payment and it defaults their installment agreement. After July 15th, as of now, that is still a default of the agreement is missing payments. I know they are going to be working with people and they are trying to do their best to help. They have really stepped up I think in this sense. But so far, that is what we have seen. However, don’t be the one that does the default based on missing this payment date.
So, pretty much when it comes to installment agreements between April 1st and July 15th, you can get them suspended, but there are caveats there. Get this information out to your clients, give them the relief. Hopefully, give them some peace of mind. I really do hope this helps relieve stress for people out there. You are the one that’s going to be telling them all this so go out there and give them this information. Share it to everyone because you never know who might have an installment agreement or who might be paying the IRS and is worried about this. So take away this anxiety.
Again, my name is Drew Foster with IRS Solutions and we are a Tax Pro’s Best Friend. Have a great day!