Despite the $2.2 trillion stimulus bill released by the Federal Government in late March and the IRS’s People First Initiative to support businesses and individuals through the pandemic, many are still experiencing financial woes. And as president-elect Joe Biden pushes lawmakers to pass another relief package, the IRS recently announced that it will expand taxpayer options for making payments through the Taxpayer Relief Initiative to give flexibility to those still struggling financially.
Details of the Initiative
The IRS has always given taxpayers some alternate tax-payment methods, but this new plan expands the offerings. Here are the key items to note:
- Qualified individual taxpayers who earn under $250,000 a year may be able to establish an installment agreement without providing a financial statement if their monthly payment proposal is deemed sufficient.
- Individual taxpayers who only owe for 2019 and who also owe less than $250,000 may qualify to establish an installment agreement without the IRS filing a federal tax-lien notice.
- The IRS extended the deadline for short-term payment plans to resolve tax liabilities to 180 days, rather than 120 days.
- There is more flexibility for taxpayers who can’t meet the payment terms of an existing offer-in-compromise agreement. (An offer in compromise allows taxpayers to settle their debt for less than the full amount owed.)
- For any organizations no longer in business, the IRS will automatically adjust certain tax balances of existing installment agreements.
- Qualified taxpayers with existing direct-debit installment agreements may be able to request a lower monthly payment rate. They may also be able to change their due date through the online payment-agreement system.
These changes do not apply to cases that are assigned to a revenue officer in field collection.
Taxes can be confusing and challenging to meet. The IRS Taxpayer Relief Initiative should help taxpayers alleviate some of the stress and confusion surrounding their taxes.
Check out our other blog addressing the impacts a new administration could have on estate taxes.