Insights

IRS Suspends New Tax Audits and Some Collection Efforts Under New “People First Initiative” in Response to COVID-19

Firm Thought Leadership

On March 25, 2020, the Internal Revenue Service (“IRS”) announced a new People First Initiative in an effort to help people facing challenges regarding the COVID-19 pandemic. The full press release is available at IRS News Release IR-2020-59.

The People First Initiative is expected to begin April 1, 2020 and continue through July 15, 2020. During this period, the IRS will take a number of key actions, including:

  1. New Audits. The IRS will generally not start new examinations, unless (i) the IRS deems it necessary to preserve the applicable statute of limitations or (ii) the taxpayer desires to begin an examination (e.g., while records are still available).
  2. Existing Audits. The IRS will continue on schedule its existing examinations, except that all in-person meetings will be suspended. Similarly, all cases before the Independent Office of Appeals will continue on schedule, although remotely.
  3. Refund Claims. The IRS will continue to process refund claims where possible, without in-person contact. The time to receive a refund is limited by statute. Taxpayers who have not filed tax returns during the last three years may still file such returns and claim their refunds.
  4. IRS Collection.
  • Installment Agreements. The IRS will suspend all Installment Agreement payments due between April 1 and July 15, 2020, although interest will continue to accrue by law. Also, the IRS will not default any Installment Agreements during this period.
  • Offers in Compromise. The IRS will suspend all Offer in Compromise payments due between April 1 and July 15, 2020, although interest will continue to accrue by law. Also, the IRS will not default any Offer in Compromise during this period for those taxpayers who are delinquent in filing their tax return for tax year 2018, provided however that such 2018 returns (and 2019 returns) are filed on or before July 15, 2020. For those taxpayers with pending OIC requests, the IRS will allow taxpayers until July 15, 2020 to provide requested additional information and will not close any pending OIC request before such time without the taxpayer’s consent.
  • Liens and Levies. The IRS will suspend all new automatic, systemic liens and levies through July 15, 2020. Also, liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended through July 15, 2020, although field revenue officers will continue to pursue high-income non-filers and perform other similar activities.

In our experience, the IRS has shown so far that it is well equipped to work remotely, and taxpayers should not expect a delay in their existing examinations as a result of the COVID-19 pandemic. The IRS is encouraging taxpayers to continue responding to requests for information during this period, if they are able to do so.
 
The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as it continues to review its programs and receive feedback from others.

Should you have any questions or concerns about the People First Initiative, please contact any of the authors of this update.

 

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