Right now there are over 11 million Americans who owe the IRS back taxes… are you one of them?
If you are, then you are going to want to read the rest of this blog post.
Recently the IRS introduced its “People First Initiative” where it temporarily suspended collection efforts during the first wave of the Covid-19 pandemic, but that program expired as of July 15, 2020.
You may have noticed that the pandemic didn’t go away in July though and seems to be back with a vengeance, which is why the IRS has created a similar program called the Taxpayer Relief Initiative.
The IRS has recognized that the pandemic has put many people in a precarious position over the past 10 months and they may not have the ability to pay what they owe right now.
It’s not a major overhaul of anything substantial, but if you currently owe taxes to the IRS, the Taxpayer Relief Initiative can be a big help.
First off, the new initiative gives you an extra 60 days to pay off your tax bill, giving you up to 180 days to make a lump sum payment.
The initiative also makes it easier to make an installment agreement with the IRS so that you can make monthly payments over several years if necessary.
The IRS is also making it possible to create the installment agreement without having to have a lien placed against your property, as long as you owe less than $250,000, which is something the IRS has never made available before.
This is a nice benefit to property owners who are concerned they may be risking their house if they have to make an installment agreement.
The IRS realizes that the pandemic has been difficult for plenty of Americans, so they are actively encouraging and working with people who have existing installment agreements and are having trouble making the payments.
If that’s you, reach out to the IRS and tell them why you’re having trouble so that you can come to a compromise without risking additional action.
You may be able to get any penalties reduced or even eliminated, but you won’t be able to if you don’t communicate with them.
Whatever you do, don’t ignore a tax bill from the IRS. And never feel you’re helpless when confronted by the IRS collection juggernaut.
You always have options, no matter how much you owe, but you have to be willing to work with the agency and explore the possibilities.