IRS Unveils Revised COVID-19-Related Collection Procedures

November 4, 2020

The Internal Revenue Service (IRS) has announced changes that it says will offer relief to taxpayers impacted by COVID-19.

The IRS said the changes should make it easier for consumers to set up payment agreements, as well as help people affected by the pandemic more easily resolve balances owed to the agency.

“The IRS understands that many taxpayers face challenges, and we’re working hard to help people facing issues paying their tax bills,” IRS Commissioner Chuck Rettig said in a statement. “Following up on our People First Initiative earlier this year, this next phase of our efforts will help with further taxpayer relief efforts.”

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Under the new IRS Taxpayer Relief Initiative, changes to collection procedures are as follows:

  • Payment plan extensions. “Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days,” the IRS said.
  • Less documentation required. Certain qualified individual taxpayers who owe less than $250,000 may set up installment agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient.
  • Tax liabilities automatically added. The IRS will automatically add certain new tax balances to existing installment agreements. The agency says this new “taxpayer-friendly approach” will help some taxpayers avoid defaulting the agreement.
  • More flexibility. In cases where taxpayers are temporarily unable to meet the payment terms of an accepted Offer in Compromise, the IRS says it will be “offering additional flexibility.”
  • Option to make changes online. Instead of having to talk to the IRS about having changes made to an existing installment agreement, qualified taxpayers with installment agreements paid by direct debit will now be able to make changes online. The IRS said, for example, that taxpayers could “propose lower monthly payment amounts and change their payment due dates.”

The IRS encourages consumers to “be responsive” when they receive a balance due notice.

“If you’re having a tax issue, don’t go silent. Please don’t ignore the notice arriving in your mailbox,” said Darren Guillot, the IRS Small Business/Self-Employed Deputy Commissioner for Collection and Operations Support. “These problems don’t get better with time. We understand tax issues and know that dealing with the IRS can be intimidating, but our employees really are here to help.”

Guillot said the IRS is continuing to “assess the wide-ranging impacts of COVID-19 and other difficulties people are experiencing” as it pertains to matters of tax compliance.

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