Los Angeles, CA: New IRS Tax Relief Initiative

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Services for Real Estate Pros with Richardson Accounting and Tax

This week the IRS has introduced additional tax relief solutions for American taxpayers. One of the biggest changes is a modification to the new $250,000 payment plan that I recently wrote about in a previous post. Due to COVID-19, the IRS has expanded their payment plans available for individuals with tax debt from $100,000 to $250,000 if the taxpayer has not been assigned to a Revenue Officer (RO). One of the biggest benefits of this payment plan was not having to disclose their assets, liabilities, income or expenses. The drawback was that the IRS would conduct a lien determination that could lead to a Notice of Federal Tax Lien (NFTL) being publicly filed.

 

The new IRS Taxpayer Relief Initiative released this week would allow individuals with a 2019 tax debt to enter into the $250,000 payment plan and avoid a lien determination. This is a major tax relief victory for taxpayers, especially those that own property or a business. For years 2018 and earlier, there will be a lien determination but the $250,000 limit still applies.

 

Short term payment plans have been extended from 120 to 180 days. This means that if you intend to pay your tax debt in full, the IRS will grant you up to six months to do so. This will prevent collection enforcement (tax liens, tax levies) during the agreement.

 

Depending on the circumstances, the IRS may also allow new tax debts to be automatically added to a payment plan that is in place. This will prevent technical default of the old payment plan and hopefully prevent any additional penalties and fees.


For taxpayers with an accepted Offer in Compromise (OIC) that are having difficulty with the payment terms they agreed to, the IRS is advising that they will provide tax relief. Contact the IRS OIC unit to request assistance.

 

Lastly, another tax relief option available for taxpayers having difficulties paying their taxes due to job loss, COVID-19 or other circumstances is to apply for a temporary hardship known as Currently Not Collectible (CNC). The IRS will suspend tax collection enforcement but they may revisit the account in the future in case the taxpayer's financial situation has improved and is able to begin paying down their tax debt.


This is a lot to digest but it is a clear indication that the IRS recognizes the challenges faced by the American public as we navigate through COVID-19. This is a fluid situation so stay tuned for tax relief updates.

Posted by

Howard Richardson

Enrolled Agent

IRS and State Tax Representation

(213) 545-1799

howard@hrichtax.com

http://www.hrichtax.com

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