Due to COVID-19 pandemic, the IRS is providing relief to taxpayers in a variety of ways as part of its People First Initiative. For instance, the IRS modified certain collection activities and extended the tax filing and payment deadline to Wednesday, July 15, 2020.
As for changes to IRS exams or audits under the initiative, here is what you need to know:
Field Audits, Office Audits, and Correspondence Audits
Generally, the IRS will not start new field, office, or correspondence audits but will continue to work refund claims, where possible, without in-person contact. The IRS may, however, start new audits if needed to preserve the statute of limitations.
In-person meetings – In-person meetings for current field and office audits are on hold. However, examiners will continue their work remotely, where possible. Taxpayers should respond to any requests for information during this period, if possible.
Unique situations – Corporations and businesses may want to begin a previously scheduled audit while people and records are available. When it is in the best interest of both parties and the appropriate people are available, the IRS may move forward with an audit in these circumstances.
General requests for information – If requested, taxpayers should reply to all IRS correspondence.
Earned Income Tax Credit and Wage Verification Reviews
Taxpayers have until July 15, 2020 to respond to IRS requests for information to verify eligibility for the Earned Income Tax Credit or to verify their reported income. These taxpayers should submit all requested information prior to the July 15th deadline, but note that the IRS will not deny these credits prior to July 15th if taxpayers are unable to successfully contact the IRS and explain why the information is not available.
Independent Office of Appeals
IRS Appeals employees continue to work their cases. These employees are not currently holding in-person meetings, but may schedule conferences by phone or video. Taxpayers should respond to any requests for information form the Independent Office of Appeals.
Statute of Limitations
The IRS will continue to protect all statutes of limitations. If the expiration of a statute might be jeopardized during this period, taxpayers are encouraged to cooperate in extending the statute. Otherwise, the IRS will issue Statutory Notices of Deficiency and pursue similar actions to protect the interests of the government.
Tax Tip 2020-57 #IRSTaxTip