The IRS is following up on their People First Initiative from summer 2020 with some new administrative program changes to make life a little easier for taxpayers that owe back taxes and are not in a position to immediately repay those tax debts. While these are not new programs, the IRS is attempting to make it easier for taxpayers to take advantage of the existing programs, by increasing access to relief.
Under this new initiative:
- Taxpayers now have 180 days to pay tax debts on a short-term payment plan, up from 120 days.
- For taxpayers already paying on a previously accepted Offer in Compromise, the IRS is now offering some flexibility on the payment terms of that accepted offer.
- Individuals with an existing payment plan on a tax debt will automatically have new tax debt balances tacked on to their existing payment plan.
- As per March 2020 changes to the Internal Revenue Manual, certain individuals with income tax debts less than $250,000 no longer need to submit financial documentation in order to obtain a payment plan. This option is only available via call center staff, not cases that are assigned to field agents.
- For individuals that only owe 2019 tax debt, and owe less than $250,000, the IRS may agree to not file a Notice of Federal Tax Lien (NFTL) against the taxpayer.
- IRS is now allowing some individuals with existing Direct Debit Installment Agreements to use the IRS website tool (Online Payment Agreement) to modify their payment plan to lower their monthly payments.
If you owe back taxes to the IRS, you may qualify for these simplified options to take care of your tax problem.