If you heard that the IRS is hitting the brakes on most collections right now, it’s true. Taxpayers who generally aren’t behind on payments may be able to hold off on paying 2019 and 2020 taxes until July 15. But not everyone’s off the hook.
The following three situations in particular will keep the IRS knocking:
- You’re on an installment agreement with the IRS. You may suspend until July 15 making payments normally due in 2020, but interest will continue to accrue, and late payment fees may also be added.
- You’ve agreed to a collection action already. Some garnishments, seizures of property, civil suit proceedings and/or liens are on hold, but those involving high-income non-filers in particular may continue.
- You’re a target of IRS collection and there’s a risk that if the government waits to act, they’ll miss out on collecting because of an expiring statute or similar circumstance.
Accounting Today offers this helpful article with more insights and the IRS announcement of its “People First Initiative” outlining the areas above can be found here. It’s also important to note, as the attorneys at Crowell & Moring LLP point out, auditors are permitted to work on new cases right now without opening an official examination “as long as taxpayer contact is delayed until after the emergency declaration is lifted.”
So, don’t assume you’re off the hook on paying taxes right now. If you’re still facing action from the IRS during this time, options may be available to alleviate what you owe by when, especially if you can prove that your financial situation has been affected by the COVID-19 pandemic. And don’t assume, either, that auditors aren’t hard at work determining who to audit next. Feel free to contact us for more information.