Tax guide

Coronavirus Relief for Tax Payments, Delinquent Returns and Debt

As part of the COVID-19 taxpayer relief efforts, the IRS has implemented the People First initiative to help Americans pay their taxes owed.

Existing Installment Agreements

If you have an installment agreement that was established prior to the national emergency, any payments due between April 1 and July 15, 2020 are suspended. You may suspend payments if you are unable to comply with the terms of the agreement, and the IRS will not default any agreements during the time period mentioned above. Interest will still continue on any unpaid balances.

New Installment Agreements

If you cannot fully pay your federal taxes owed this year, you can resolve your outstanding liabilities via an installment agreement and pay that amount over time. You can apply for an installment agreement on the official IRS site.

Offers in Compromise (OIC)

Taxpayers who are truly unable to pay their taxes owed can apply for an Offer in Compromise (OIC), which can be applied for on the IRS site. The IRS has extended some relief for taxpayers in various stages of the OIC process.

Those with pending OIC applications will now have until July 15 to provide any requested additional information to support a pending OIC. No pending OIC requests will be closed before that date without the taxpayer’s consent.

Taxpayers with an existing OIC payment plan may suspend all payments until July 15 as well. Note that interest will still accrue on any unpaid balances, however.

If you have an OIC for a prior-year tax return that still has not been filed, your OIC will not be defaulted but you should file your delinquent return by July 15.

Delinquent Tax Returns

A delinquent return is one for a prior year that should have been filed but hasn’t yet been. The IRS strongly encourages all taxpayers to file for prior years, even if you are not required to. Many taxpayers are owed refunds that cannot be distributed until a return is filed, and anyone with outstanding tax debt has various options to manage and pay their debt.

Private Debt Collection

New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Field, Office and Correspondence Audits

During this period, the IRS will generally not start new field, office and correspondence examinations. When possible, they will continue to work without in-person contact. The IRS will, however, start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.

Back Child Support Still Owed

If a taxpayer owes back child support, that amount will be withheld from the stimulus money and delivered by the IRS to the custodial parent—essentially, the process is the same as having child support withheld from a tax refund. The custodial parent would only receive the amount owed in back child support—they would not receive the entire stimulus check amount unless the back child support was more than the stimulus payment, and it would be delivered in the same process that garnished support payments usually arrive.

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