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People First Initiative Temporary Relief from Audit and Collection Activities by IRS

Quick Excerpts:

Till now, the IRS (Internal Revenue Service) has made all efforts to help taxpayers get through the COVID-19 crisis. People First Initiative is an extensive measure in that direction. The IRS announced the People First Initiative on March 25, 2020. There are some provisions which are outlined here.

Some specifics about the IRS’ People First Initiative:

Let have a look at legislation’s main points:

  • Instalment Agreement:As per existing Instalment Agreement, payments of all those taxpayers are suspended whose payments are due between April 1 and July 15, 2020. If Taxpayers prefer, they can suspend payments during this time frame and for which IRS will not consider it as default of any Instalment Agreement. However, the Interest will continue to accrue on any unpaid balances.
  • Offers in Compromise (OIC):

Let’s have a look at how IRS helps throughout the OIC process:

  • Pending OIC Applications: The taxpayers who have submitted an OIC application will be entitled for grace period through July 15 for providing additional information for pending OIC.
  • OIC Payments: July 15, 2020 will be the same relaxation period for suspending all payments on accepted OICs.
  • Negligence in Return Filings: Any kind of negligence by taxpayers while filing return will not be defaulted by the IRS. In such case, taxpayers need to file any such 2018 and 2019 return on or before July 15, 2020.
  • Reminder for Non-Filers: The taxpayers who have not filed return before 2019, should file their delinquent returns and should claim their refunds.
  • Field Collection Activities: Any kind of action related to lien and levy including seizure of a personal residence by field revenue officers will be suspended during this time duration.
  • Automated liens and levies: Similarly, new automatic, systematic liens will also be suspended during this time.
  • Passport Certifications: To avoid receiving or renewing passports, taxpayers who are considered ‘Seriously Delinquent’ are encouraged to submit a request for an Instalment Agreement, if applicable.
  • Audit: During this time period, new field, office and correspondence examinations will be suspended unless it is required to protect government’s interest. Without in-person contact, the IRS will work for refund claims.
  • In-Person Meetings: To aid in social-distancing practices, IRS examiners will avoid in-person meetings and will continue to work remotely, where possible.
  • Exceptions to Some Situations: The IRS will start compliance exam in case taxpayer desires, and it is in interest of both parties, considering latest COVID-19 developments.
  • Earned Income Tax Credit and Wage Verification Reviews: The taxpayers who qualify for the Earned Income Tax Credit, need to respond to the IRS or need to verify their income before July 15, 2020.

The IRS will suspend general collections activities, however, not all collection actions are suspended.

  • Business that run as usual in few areas:
    Although IRS operations are hampered due to current crisis, the Office of Appeals will continue working through conferences, over the phone or by video conference with taxpayers. Even the Practitioner Priority Service can be accessible through telephone line with limited staff.
  • Takeaway:
    In context to People First Initiative, the IRS has extended temporary reliefs and relaxations which will turn out to be opportunity for taxpayers to handle all tax compliance issues.

References:
https://www.thetaxadviser.com/newsletters/2020/jun/irs-people-first-audit-collection-relief-coronavirus.html

https://www.aicpa.org/press/pressreleases/2020/aicpa-encourages-small-businesses-to-apply-for-ppp-loans.html

https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

By John Bugh

John Bugh is Chief Revenue Officer for Pacific Accounting and Business Services (PABS), responsible for the strategic direction, planning, vision, growth, and performance of the company’s marketing, branding, and revenue streams.

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