The New IRS COVID Relief Rules — What You Need to Know: Part III

Tax debt has always prompted considerable stress, but this is doubly true during a pandemic, when resources for handling this burden may be scarce.

While the previous IRS People First Initiative made it possible to step back and focus on other, more urgent financial concerns, the agency may be in the first stages of cracking down on delinquent taxpayers.

For now, the IRS offers far more flexibility and lenience to those dealing with tax debt via the Taxpayer Relief Initiative — as detailed below:

Halting Collection Efforts

Good news for taxpayers fearful of collection action from the IRS: the agency will, in select situations, halt such efforts for those who are unable to pay. This brief period of respite may provide enough time for struggling taxpayers to regroup and develop new plans for handling their outstanding obligations.

More good news: those who can no longer abide by the payment terms of previously accepted offers in compromise may enjoy greater flexibility from the IRS. This may make OIC arrangements easier to handle for the time being.

Reasonable Cause Relief

Those who fail to file, pay, or deposit federal taxes may currently be eligible for relief based on the concept of reasonable cause.

Previously, reasonable cause was difficult to obtain, with applicants required to provide thorough evidence of their inability to meet tax obligations due to natural disasters, serious illness, or other extenuating circumstances. These days, however, the pandemic itself may represent reason enough to extend relief, particularly for those who have suffered COVID or struggled with the current economic turmoil.

The Taxpayer Relief Initiative may offer temporary respite from the IRS, but this is unlikely to last. The sooner you get your tax situation under control, the better. The Highland Tax Group can help — contact us today to get started.