As part of the new Taxpayer Relief Initiative, the IRS is making it easier to set up payment arrangements, installment agreements and Offers in Compromise. This initiative is in response to the challenges created by COVID-19 pandemic.
- Short-term payment plans extended to 180 days, up from 120 days.
- With existing Offers in Compromise, more flexibility and payment extensions to meet its terms.
- Instead of automatically defaulting installment agreements when new tax balances accrue, the IRS will now permit certain new taxes to be added to existing installment agreements.
- Taxpayers with taxes owed of $250,000 or less, may now set up installment agreements without providing financial statements.
- If taxpayers have outstanding taxes due for tax year 2019 and they are less than 250,000, taxpayers may now qualify for installment agreements without a federal tax lien being filed.
- Qualified taxpayers who already have an existing direct debit installment agreement can now use the Online Payment Agreement system to propose lower monthly payment amounts and alter their payment due dates.
- Indefinite delay of collection until a taxpayer’s financial condition improves.
The key to requesting relief under the Taxpayer Relief Initiative is responding to IRS Balance Due notices in a timely fashion and requesting relief; taxpayer may respond by letter – without the need to talk to a representative. This a big step forward by the IRS to help taxpayers during the COVID-19 pandemic. Importantly, the IRS concludes by saying: Make sure you’re getting a reputable representative, and not some fly-by-night outfit on late night television or the radio that charges fees for things the IRS does for free – or at minimal cost. We appreciate the support of tax professionals and other partners in getting the word out – I know they’re just as committed as we are to helping those in need.