IRS Announces “People First Initiative” to Address Tax Challenges Related to COVID-19

March 28, 2020

By Miri Forster

The IRS has announced a “People First Initiative” to provide relief to taxpayers in response to the coronavirus (COVID-19) emergency. The announcement follows IRS Notice 2020-18 and related frequently asked questions which extend certain federal tax filing and tax payment deadlines. 

The People First Initiative provides temporary changes to various IRS activities beginning on or about April 1, 2020, through (initially) July 15, 2020.  While some activities are currently suspended, others will move forward in a modified fashion to the extent possible. Highlights of the Initiative are as follows:

Installment Agreements and Offers-in-Compromise

  • Installment Agreements--For existing installment agreements, payments due between April 1 and July 15, 2020 are suspended. The IRS will not default any installment agreements during this period of time. Taxpayers able to meet their monthly payments are encouraged to do so, as interest continues to accrue on all unpaid balances.  Taxpayers unable to pay their federal taxes can enter into a monthly agreement with the IRS.
  • Offers-in Compromise (“OIC”)--For pending OIC applications, taxpayers have until July 15, 2020 to provide additional supporting information. In addition, no OIC requests will be closed prior to July 15, 2020 without taxpayer consent.
    Taxpayers may suspend payments on accepted OICs until July 15, 2020.  As interest continues to accrue, taxpayers that are able to meet their payments should continue to do so.

    Taxpayers with tax liabilities in excess of their net worth can apply for an offer-in-compromise with the IRS.

IRS Collection Activities

  • Liens and levies (including seizures of a personal residence) initiated by field revenue officers are suspended, with exceptions where warranted to pursue high income non-filers and to perform other similar activities.
  • New automatic, systemic liens and levies are suspended through July 15, 2020.

IRS Examinations and IRS Appeals

  • IRS Examinations--The IRS will generally not begin any new field, office, or correspondence exams through July 15, 2020, unless necessary to preserve the applicable statute of limitations (generally, three years from when the return is filed) or in unique situations where it is determined in the best interest of both the taxpayer and the IRS to move forward. While all in-person meetings are suspended, open examinations will proceed remotely where possible. Therefore, to allow open examinations to advance, taxpayers are encouraged to respond to outstanding requests for information as possible. The IRS also encourages taxpayers to submit responses to any other IRS correspondence requesting additional information during this time. 
  • IRS Appeals—IRS Appeals will continue to work cases, with conferences held either via telephone or by videoconference. Taxpayers are encouraged to promptly respond to outstanding requests for information in all Appeals matters.

Statute of Limitations—The IRS will continue to protect applicable statutes of limitations by requesting extensions of statutes set to expire during 2020. For statutes expiring after 2020, the IRS is expected to forego action until at least July 15, 2020. Taxpayers with outstanding refund claims from prior tax years should make sure to file outstanding returns before the applicable refund statute expires. 

We will keep you informed as the IRS releases additional information on the implementation of its People First Initiative in response to coronavirus tax-related matters.

About Miri Forster

Miri Forster is a Principal and Co-Leader of the Tax Controversy Practice.