Firm Insights

On Wednesday March 25, 2020, the IRS announced a new initiative focused on temporary relief for taxpayers with past due tax obligations, as well as those who are under audit or have matters pending before the IRS Office of Appeals. IRS Commissioner Chuck Rettig stated, “[The IRS] is temporarily adjusting its processes to help people and businesses during these uncertain times.”

People First Initiative

The initiative, known as “People First” is projected to be in effect from April 1, 2020 until July 15, 2020.

Importantly, in-person contacts with the IRS will be limited to the maximum extent possible. However, the IRS plans to make every effort to protect the statute of limitations for collection of tax, and may reach out to taxpayers requesting extensions when applicable. There may be reasons for taxpayers to refuse to sign such extensions, but such decisions should be made after consulting legal counsel.

“The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” Rettig said.

Additional information on the specifics of the People First Initiative is expected to be released soon.

Key Actions in the IRS People First Initiative Include:

Existing Installment Agreements

• For taxpayers who are current in Installment Agreements, payments due anytime between the period April 1, 2020 to July 15, 2020, are suspended.

Offers in Compromise (“OIC”)

• For taxpayers who have pending Offers in Compromise, the IRS will not close them prior to July 15 without the taxpayer’s consent.
• Additionally, deadlines related to producing requested information in support of pending OICs are extended until at least July 15.
• Taxpayers may elect to suspend payments for accepted OICs during the period, and OICs will not default due to a delinquent 2018 income tax return if filed prior to July 15, 2020.

Liens and Levies

• IRS Revenue Officers will suspend initiation of liens and levies during the period. However, individuals with unfiled returns and high income will not be afforded such protection and revenue officers will still pursue collection actions accordingly.
• Automatic liens and levies will be suspended during the period.

Passport Certifications to the State Department

• Prevention of renewing and receiving passports will be suspended during the period. The IRS will suspend any certification action for “seriously delinquent” taxpayers, which would otherwise prevent taxpayers from renewing or receiving a passport.

Private Debt Collection

• Forwarding new delinquent accounts to private debt collectors will be suspended during the period.

Field, Office and Correspondence Audits

• No new field, office, or correspondence audits will be initiated during the period, and in-person contact will be suspended for open examinations. Teleconferences may still be performed.
• The IRS recognizes that some businesses may not be able to promptly respond to requests for information and documentation due to not having requisite personnel on site and may agree to a reduction in examination activity.
• In-person conferences before the IRS Office of Appeals will be suspended during the period. However, videoconference or telephonic conferences may be substituted.

Statute of Limitations

• The IRS stresses its intent to protect applicable statutes of limitation for collection of tax and encourages taxpayers to agree to extensions of the statute of limitations.