New IRS Changes – Address Your Tax Issue Now

November 7, 2020

On November 2, 2020 the IRS issued a release highlighting new or expanded relief options for people dealing with unpaid taxes, penalties and interest.  The recent changes made to the IRS collection policies and procedures provide greater flexibility for taxpayers and should really be considered while they remain in place.  IRS problems rarely get better without being addressed and you now have more options available to help get that monkey off your back.

In response to COVID-related hardships and natural disasters throughout our country, the IRS highlighted the following initiatives:

• Raising awareness of penalty abatement opportunities with reasonable cause assistance

• Individuals who owe $250,000 or less for their 2019 tax liability may enter into a single installment agreement without having a tax lien filed

• Extending the short-term payment option timeframe from 120 days to 180 days

• Reducing the documentation requirements (financial information disclosure) for individuals to enter into a payment plan when they owe $250,000 or less and have not had their case assigned to a revenue officer

• Providing guidance for new tax year balances to be automatically included in existing payment plans for individuals

• Providing relief for taxpayers who have a previously accepted Offer In Compromise in place, but are having difficulty adhering to the existing terms of the offer

There can be significant penalties for failing to file a tax return on time, other penalties for failing to pay your taxes on time and then interest to top it off.  Before you can qualify for collection alternatives, you must first be in compliance with outstanding tax return filings and be withholding appropriately for the current tax year.

Instead of letting a tax problem continue to worry you, make use of the recently expanded IRS relief options.  If you do not feel comfortable addressing the IRS by yourself, contact a local tax professional to understand your rights and options to solving your tax problem. 

In addition to the relief options highlighted in the IRS press release, you may be eligible for one of the following tax problem resolutions:

1. Settle your tax debt for less than the amount owed – Offer in Compromise

2. Make payments to pay off your tax debt over time – Installment Agreement

3. Stop enforced collections due to your inability to pay – Currently Not Collectible Status

4. Remove or reduce penalties – Penalty Abatement

To get help with an IRS tax problem, or learn more legal, tax-saving strategies for business owners, contact me at (360) 474-5892 or e-mail me at tate@ensigncpa.com.