COVID Tax Tip 2020-84, July 13, 2020
The IRS reminds taxpayers who received tax relief as part of the People First Initiative and didn’t make previously owed tax payments between March 25, 2020 and July 15, 2020 they will need to restart those payments to avoid penalties.
Here’s what people need to do to restart their IRS Installment Agreements, Offers in Compromise or Private Debt Collection program payments:
Installment Agreements
Taxpayers who suspended their installment agreement payments between April 1 and July 15, 2020, will need to resume their payments by their first due date after July 15. Under the People First Initiative, the IRS didn’t default agreements, but interest did accrue and the balance remained.
Taxpayers who had their bank suspend direct debit payments, should contact the bank immediately to ensure their first monthly payment on or after July 15, 2020 is sent to avoid penalties. If someone can’t meet their current installment agreement terms because of a COVID-related hardship, they can revise the agreement or call the number on their IRS notice if they have a Direct Debit Installment Agreement.
Offer in Compromise
- Pending offers – If the IRS is currently reviewing a taxpayer’s Offer in Compromise but hasn’t accepted it, the taxpayer should restart their required payments on July 15, 2020. The IRS will amend the taxpayer’s offer to allow them to pay any skipped payments at the end of the offer period, if the offer is accepted.
- Accepted offers – If a taxpayer has an Offer in Compromise, and they were unable to make the payments because of a COVID-19 hardship, they should restart payments and make up the missed payments by July 15, 2020. If the taxpayer can’t to make up the missed payments, they should call the number on the IRS notice to discuss their situation.
Private Debt Collection
The IRS didn’t forward new delinquent accounts to private debt collection agencies from April 1 to July 15, 2020 and collection agency interaction with taxpayers was limited to phone calls, unless otherwise requested by the taxpayer.
Taxpayers should restart private debt collection payments by July 15. They should also work with their assigned collection agency to establish a new payment arrangement or restructure their existing one based on their current situation.
Other payment options
Taxpayers who owe but can’t pay, or have questions about their payments, can call the number on their notice but they may experience a long wait time on the phone. IRS.gov offers several convenient ways to make one time or recurring electronic tax payments.