IRS Offers Help for Taxpayers Struggling with Outstanding Tax Debts by Rick Bazzani, CPA
Posted on December 08, 2020
by
Rick Bazzani
If you are struggling to pay an outstanding tax liability under the financial pressure of the COVID-19 health crisis, help has arrived. On November 2, the IRS unveiled a Taxpayer Relief Initiative, offering new tools and payment options for individuals and businesses to settle unresolved tax debts.
The IRS has always offered taxpayers different options for settling unpaid tax bills, including offers in compromise and installment agreements that allow balances to be paid over a specific period of time. Under the new Taxpayer Relief Initiative, these options have been expanded to include the following measures:
- Extending the length of short-term installment agreement payment plans for qualifying taxpayers from 120 days to 180 days;
- Offering added flexibility to the payment terms of an accepted offer in compromise, in which taxpayers agreed to settle their tax bills for less than the amount owed;
- Automatically adding certain new tax balances to existing installment agreements to help individuals and out-of-business companies avoid default;
- Easing paperwork requirements for certain individuals with less than $250,000 in tax liabilities to more easily set up installment agreements without financial verification, provided their cases were not yet assigned revenue officers;
- Permitting individual taxpayers who owe less than $250,000 for tax year 2019 to set up installment agreements without the IRS filing a notice of federal tax lien;
- Enabling qualified taxpayers with existing direct debit installment agreements to use the IRS’s Online Payment Agreement (OPA) system to propose lower monthly payment amounts and change their payment due dates. The service is available to individuals who owe $50,000 or less in combined income tax, penalties and interest, and to businesses that owe $25,000 or less combined that have filed all tax returns.
In addition, the IRS is offering qualifying taxpayers reasonable cause assistance and first-time penalty abatement relief as well as the ability to request delays to the collections process.
If you are having difficulty meeting your outstanding tax liabilities, speak up. It is critical that you reach out to your CPA and tax advisors to help you work with the IRS and establish a plan for achieving tax compliance sooner, rather than later.
About the Author: Rick D. Bazzani, CPA, is a senior manager in the Tax Services practice of Berkowitz Pollack Brant Advisors + CPAs, where he provides individuals and business owners with a broad range of tax-efficient estate, trust and gift-planning services. He can be reached in the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or at info@bpbcpa.com.
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