IRS lightens taxpayers' compliance and enforcement burden to help with outbreak

Pedro Gonçalves
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IRS lightens taxpayers' compliance and enforcement burden to help with outbreak

The Internal Revenue Service is taking a "sweeping series of steps" to assist taxpayers on issues ranging from payment guidelines to compliance actions during the coronavirus outbreak which could give non-compliant taxpayers a way back.

The changes — part of a new "People First Initiative" — include postponing certain payments related to installment agreements and offers in compromise, and limiting certain enforcement. The agency expects the measures to kick in by April 1 and run initially through July 15.

According to IRS Commissioner Chuck Rettig, it provides immediate relief to help people facing uncertainty over taxes and temporarily adjusts IRS processes to help people and businesses during these uncertain times. Rettig added: "We are facing this together, and we want to be part of the solution to improve the lives of all people in our country."

We are facing this together, and we want to be part of the solution to improve the lives of all people in our country"

According to US tax expert Cory Stigile, the suspension of these powers offers a unique opportunity for non-filing or late-filing taxpayers to get into compliance.

"The benefits of the initiative are particularly unique because of the confluence of two events.  First, the IRS is suspending lien and levy activity until July 15th.   These are two of their primary enforcement tools to collect taxes.  This permits of the filing delinquent returns together with an installment request or other collection alternative with a completely different dynamic of suspended enforced collection. 

"Second, a significant part of the recent economic stimulus is being administered through the IRS so the filing of a 2019 return, or prior returns, may result in a refund, or at least an offset due to the relief provisions."

The programme, however, does not suspend the IRS' ability to withhold passport certifications for non-compliant taxpayers, thereby preventing them from obtaining a US passport or renewing an expiring one. The IRS intends to deploy this power to encourage ‘delinquent taxpayers' to submit a request for an instalment agreement or, if applicable, an offer in compromise during this period.

Specifics about the provisions of the initiative will be released soon.

 

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