Countless Americans are facing financial turmoil. According to recent reports, more than 10% of workers between March 17 and April 2 filed for unemployment in the last three weeks. Sadly, many of them weren’t preparing for an economic downturn, as market predictions for 2020 were relatively positive.
These times can be especially stressful for those who owe money to the government. In response, the Internal Revenue Service (IRS) is taking steps that could possibly ease the burden on struggling Americans as part of their People First Initiative.
On top of expanding the filing deadline, the initiative will temporarily modify certain agency activities from April 1 through July 15, 2020.
Changes for payments on Installment Agreements
Taxpayers under existing Installment Agreements may withhold payments between April 1 and July 15, 2020. This means the IRS won’t renege on any Installment Agreements during this time. However, interest can still accumulate on any unpaid amounts.
Those in new Installment Agreements also have options. The IRS says those who can’t pay their federal tax liabilities can work out a payment plan with the agency that works for them.
Offering assistance with the OIC process
Taxpayers often use an Offer in Compromise (OIC) during times of financial stress. This settlement allows taxpayers to negotiate a lower balance with the IRS by either giving the agency a lump sum or working out a payment agreement. Due to current circumstances, the IRS made some adjustments to the OIC process:
· Extension on information requests: The IRS is allowing taxpayers to provide additional requested information supporting their OIC until July 15, 2020. The agency also says it won’t close any pending request before the deadline without taxpayer approval.
- Suspension of payments: Taxpayers will be able to suspend all payments on accepted OICs until July 15, 2020. However, interest will still accrue on any unpaid balances.
While the IRS is offering these benefits for 2019 taxes, the agency says it won’t “default an OIC” for taxpayers who are delinquent in filing their 2018 taxes. Still, such taxpayers do need to file their 2018 tax returns by the July 15, 2020 deadline.
New provisions can still confuse many
The last thing many people want to deal with right now is keeping up with tax changes. Luckily, people can get the assistance they need with an experienced tax attorney.