Taxpayers who took advantage of the IRS's payment suspension option under the People First Initiative are reminded to resume making scheduled payments on or after July 15th to avoid any penalties and/or default.
The following information provides details on how to restart: (a) IRS Installment Agreements; (b) Offers in Compromise; or (c) Private Debt Collection program payments.
Taxpayers who suspended their installment agreement payments between April 1st and July 15th will need to resume regularly scheduled payments by their first due date after July 15th. Under the IRS's People First Initiative, the IRS did not default any of these agreements, but interest continued to accrue on any unpaid balance.
To avoid penalties, taxpayers who had their bank suspend direct debit payments should contact the bank immediately to ensure the proper scheduling of their first monthly payment on or after July 15, 2020. If someone cannot meet their current installment agreement terms because of a COVID-related hardship, they can either request to 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 has not yet accepted it, the taxpayer should restart their required payments on July 15, 2020. If the offer is accepted, IRS will amend the taxpayer's offer to allow them to pay any skipped payments at the end of the offer period.
Accepted offers – If a taxpayer has a previously accepted Offer in Compromise, but they were unable to make the required payments because of a COVID-19 hardship, they should restart regular payments and remit any missed payments by July 15, 2020. If the taxpayer cannot make up the missed payments, they should call the number on the IRS notice to discuss their specific situation.
Private Debt Collection
The IRS did not forward any new delinquent accounts to private debt collection agencies between April 1st and July 15th, and all 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 15th. 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 cannot 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.
For more information, see the following resources:
COVID Tax Tip 2020-84 #IRSTaxTip