With the brutal economic fallout of the COVID-19 pandemic, many people who owe
taxes to the IRS or a state are wondering what to expect. It’s hard enough as it is for
people to keep roofs over their heads and food on their tables. Should we also be
worried that the IRS or state taxing authority is going to make our lives even more
Although the IRS’s and state taxing authorities’ response to the coronavirus crisis if fluid and continues to evolve, there is a lot helpful information available right now. I’ve taken a moment to compile what I think are the most important things for people in collections with the IRS or a state to know. I’ll explain whether you may be eligible for relief, tell you how to avoid wasting time sitting on hold with the IRS, and hopefully help reduce your stress level by informing of what you should and should not expect.
The following is what you need to know...
• The IRS and most states are continuing to pursue collections
Revenue Officers, Settlement (Appeals) Officers, and Offer Specialists are continuing to work, and continuing to pursue collection of unpaid taxes. They will continue to require that deadlines be met, and they will continue working with taxpayers and tax professionals towards resolving unpaid taxes.
The IRS Automated Collection System (ACS) will continue generating and mailing computer generated collection notices. IRS Collection personnel are avoiding in-person contact with taxpayers.
For many taxpayers, this is actually a great time to work on resolving their tax liabilities. Provided that you are eligible to enter into a tax resolution agreement, COVID-19 should not stand in the way of getting your tax liability resolved.
For those of you who have lost your jobs, are working reduced hours or have a little extra time on your hands due to self-quarantine, now is actually a great time to address unpaid taxes. Unpaid taxes don’t go away on their own. Why not make the effort now so that you’ll have one less thing to worry about once your life is back to its normal frenetic pace?
• The 800 # for IRS Collections/Automated Collection Service is useless
No one on our staff has been able to get through to a human being at ACS this week (the week of March 23rd, 2019), and we presume that ACS is not staffed by humans at this time. This means that it will be more difficult, and in some cases impossible, for taxpayers to obtain certain information from the IRS for the time being.
The presumed lack of human staffing at ACS is one more reason why you may wish to engage the assistance of a tax professional. Licensed tax professionals have access to what is called the IRS Practitioner Priority Service. Although our staff has had a very difficult time getting through to this service this week, we are told that they are operational.
The ability to access this service provides professionally represented taxpayers with a significant advantage over taxpayers who have not engaged the assistance of a tax professional, as tax pros should be able to work around most issues related to the unavailability of human beings at the ACS call center.
If you have a tax liability that has been assigned to ACS for collections (i.e. you do not have a local Revenue Officer assigned to your case), the resolution of your tax liability may be delayed. This does not mean you should put the resolution of your tax liability on the back burner.
Dedicated tax professionals, including my company’s staff, will continue to work on resolving tax liabilities assigned to ACS and will take whatever actions are necessary to move these cases along and get them resolved as quickly and as favorably as possible. For example, we may prepare proposals on behalf of certain clients and submit them along with supporting documents such that the “ball” will be in ACS’s “court” and they will be in a position to approve our proposals once they are sufficiently operational. In most cases, this will also eliminate the chance of enforcement until such time as the IRS responds.
• The evolving situation with the IRS may offer advantages to taxpayers who are in collections
Fortress Tax Relief’s service department staff of six tax attorneys and five assistants is closely monitoring all relevant developments within the IRS. We are cooperating and communicating with each other for the purpose of keeping each other abreast of any developments that could affect taxpayers, our work, and the resolution of tax issues. We are on the lookout for any changes that we may be able to use to our clients’ advantage. Likewise, we will identify changes that may be to our clients’ disadvantage and will take reasonable actions to mitigate such disadvantages whenever possible.
• You may be eligible for relief and/or greater flexibility from the IRS due to the COVID-19 crisis
Taxpayers who are on an existing Installment Agreement or who have an accepted Offer in Compromise towards which they are making monthly payments have the option to suspend payments to the IRS that are due between April 1st and July 15th, 2020.
The IRS and states may be more flexible than usual with regard to extending deadlines and requiring payments. Contact the Revenue Officer assigned to your case—or your tax professional if you have one–if you need additional time to submit documents or make payments to the IRS.
The IRS has extended the deadline for both filing and paying your 2019 Form 1040 to July 15th, 2020. The same is not necessarily true for your state income tax return. Please check with your state taxing agency for further details. More information is available at: https://www.taxadmin.org/state-tax-agencies
• A tax resolution professional can help you if you are unable to meet your necessary expenses and tax obligations
If you are unable to meet the necessary expenses of your business or household while also remaining current with your tax obligations, an experienced tax resolution professional can help you. A good pro can help you prioritize how to spend the money that you do have so as to minimize future consequences and repercussions.
If your financial difficulties are being exacerbated by the COVID-19 crisis, know that help is available. At Fortress Tax Relief, assisting individuals and businesses with financial difficulties is what we do. No matter how bad your situation may be, we are committed to making it better.
We have caring and knowledgeable tax relief professionals on staff who would be happy to evaluate your situation and detail a solution for you at no charge.