By Anthony Diosdi
On March 18th, the Internal Revenue Service (“IRS”) promulgated Notice 2020-17 entitled “Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.” The notice provided for an extension of time to pay federal income taxes originally due April 15, 2020 until July 15, 2020. This relief applied only to individual tax amounts up to $1,000,000, regardless of filing status or up to $10,000,000 for each consolidated group or each C corporation that does not file a consolidated tax return.
On March 20th, Treasury Secretary Mnuchin announced on Twitter that the deadline to file tax returns has been extended to July 15th.
On March 25th, the IRS unveiled a new “People First Initiative.” This initiative was enacted by the IRS in an effort to “at least temporarily ease the tax burden” during the coronavirus virus pandemic. The highlights of the “People First Initiative” include the following:
As a General Rule- No New Audits of Tax Returns
Unless the statute of limitations is about to expire, the IRS will not initiate any new field, office, or correspondence audits of tax returns.
Collections of Most Back Tax Liabilities
The IRS has instructed its revenue officers to suspend the enforcement of liens and levies (including the seizure of personal residences) during the coronavirus pandemic. However, revenue officers will continue to pursue some high-income taxpayers who did not file their tax returns. The IRS will also suspend forwarding cases to private debt collection agencies during the coronavirus outbreak.
Passport Certification to the State Department
The IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during the coronavirus pandemic.
Existing Installment Payment Agreements
For taxpayers under an existing Installment Payment Agreement, payments due to the IRS between April 1 and July 15, 2020 are suspended. However, interest will continue to accrue on any unpaid balances.
The “People First Initiative” reflects the extraordinary steps that the IRS is taking to assist individuals and businesses impacted by the coronavirus.
Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP, located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi advises clients in tax matters domestically and internationally throughout the United States, Asia, Europe, Australia, Canada, and South America. Anthony Diosdi may be reached at (415) 318-3990 or by email: adiosdi@sftaxcounsel.com.
This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.