IRS starts collecting overdue tax payments

Posted by Jeffrey Siegel on August 6, 2020

The Internal Revenue Service reminded taxpayers last month that they will need to resume paying their taxes on July 15 as its “People First Initiative” to provide tax and penalty relief in response to the novel coronavirus pandemic comes to a close.  

July 15 is also the date, of course, when taxpayers were expected to file their tax returns in this lengthened tax season, unless they file for an extension.  Many people and tax preparation organizations are asking the IRS to continue its tax and penalty relief, however, as the COVID-19 pandemic continues to spread, with record numbers of cases being reported in states across the country.

The following recommendations have been made to address the following areas:

  • Penalty relief: Currently, taxpayers who fail to file a return or fail to pay an amount shown as tax on the return on or before its due date are subject to a penalty. The IRS should automatically waive penalties for the 2019 tax year through the extended filing deadline for all taxpayers. In addition, the  IRS should reassess the impact of the coronavirus during 2021 and consider offering similar penalty relief for the 2020 tax year.
  • Installment agreements: Currently, taxpayers who can’t pay the full amount of tax due in one payment may enter into an agreement with the IRS to pay any tax due in installments. The IRS should establish an expedited process to approve new installment agreements or modifications of existing installment agreements based on realistic and affordable payment arrangements for taxpayers impacted by the coronavirus.
  • Delay in IRS collections: Currently, if taxpayers don’t pay their tax obligation in full at the time it is due, they generally will receive a series of escalating automated notices reminding them of the amount owed, including any penalties and interest accrued, and demanding payment. These notices precede the automated collection process, which continues until the account is satisfied, the case is transferred to a revenue officer or until the IRS is no longer able to legally collect the tax.The IRS should continue to halt its automatic collections activities of liens and levies for at least an additional 90 days after July 15.

IRS People First Initiative ending

Meanwhile, the IRS reminded taxpayers who took advantage of the People First Initiative tax relief and didn’t make their previously owed tax payments between March 25 to July 15 that they need to restart their payments.

As the IRS continues to reopen its operations across the country, taxpayers who were in payment agreements and skipped any payments from March 25 and July 15 should start paying again to avoid penalties and possible default on their agreements, according to the agency.

“Through the People First Initiative, we have endeavored to provide unprecedented relief to help those who owed federal taxes and allow them extra time,” said IRS commissioner Chuck Rettig. “As we resume a phased-in approach to our normal operations, we are sympathetic to the many Americans still suffering COVID-related hardships and stand ready to continue offering help to those who need it.”

But the IRS needs to do more.  People are still unemployed and cannot go back to work.  Millions of jobs have been lost. The pandemic is getting worse in the United States and federal assistance has expired, with no resolution in sight.  It does not make sense to add this burden to Americans during this time of crisis.

Need back tax help in Kansas City?  Bank account levied in Kansas City?  Paycheck garnished in Kansas City?  Lien on business or home in Kansas City? If you or a client need help fighting off the IRS, call Jeffrey R. Siegel, your Kansas City tax attorney.  We help with IRS liens, wage garnishments, levies, offers in compromise, innocent spouse relief, federal employment tax, Trust Fund Recovery Penalty and installment agreements.  Bring back some stability to your life, and call (913) 735-4829.