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IRS Notices in a COVID-19 World | Tax Notices | Florida

This IRS Tax Relief Blog article was contributed by the tax professionals at Flat Fee Tax Relief.


Due to the shutdowns, lock-downs and chaos of COVID-19, the IRS began mailing their backlog of letters and notices to taxpayers in the agency’s steps to return to normal operations. Because of the COVID-19 shutdowns, the IRS has been recently mailing correspondence dated as early as March, 2020. As a result, many of the notices were mailed with past due payment or response dates. To save time and costs, the IRS in most cases will not generate a new notice.


Because many taxpayers have been negatively impacted by unemployment and business shutdowns, the IRS will include Notice 1052, Important! You Have More Time to Make Your Payment, as an insert that will provide a new, updated pay or response date. Please read this insert carefully. It explains why the IRS notice was delayed and, more importantly, provides a new date in which to pay or respond. Below are key points taxpayers should note when the notice is received. They should:

1. Review the last page of the insert to determine if there is a new due date.

2. Disregard the notices if steps have already been taken to resolve the issue.

3. Visit IRS.gov/coronavirus for more information.

4. You can contact the IRS using the number on the notice if you have additional questions. Keep in mind that phone lines remain extremely busy as the IRS has not fully resumed operations.

5. Look at settling your tax debt with an Offer in Compromise. Should you have a tax bill owed to the IRS, it may be an opportune time to submit an Offer in Compromise and settle your tax debt. Why is that, you may ask. This is why. The IRS always has tax debt to collect. Because of the suspension of IRS enforcement during COVID-19, the IRS didn't close out any files. The agency is now faced with added taxpayers with more tax problems.


It is the opinion of the tax professionals at Flat Fee Tax Relief that the IRS will be so overwhelmed with new tax debt cases that will be added to their backlogged cases that pressure will mount on the agency to settle cases. That's our informed opinion. Take it or leave it, but that's what we believe will happen.


What if you are still unable to pay the IRS?


Times are still difficult and tough. We all know that people are having a hard time making ends meet. Well the IRS also knows this. If you are unable to make your payments to the IRS due to the loss of income or increased household expenses, you may qualify for a Collection Alternative which could include an installment agreements, postponing payments until financial circumstances improve, or an Offer in Compromise.


In a "normal year," the IRS will receive approximately 80,000 Offer in Compromise submissions and of those settlement proposals the agency will approve about 42% of those. Flat Fee Tax Relief anticipates these numbers to dramatically increased.


KNOW THIS: The IRS always has two (2) GOALS. One goal is to collect money. Even if the IRS settles a tax debt for as little as $100, which they will accept under the right circumstances, the $100 is counted in "the collection column." The IRS needs positive statistics.


The 2nd goal is to close cases. In a "normal year" it's all the IRS can do to "keep up." Imagine what will happen with a caseload that is doubled or tripled. The IRS will have an incentive to approve as many legitimate Offer in Compromise submissions as possible. The agency will have to close cases just to keep up. Once again, that is our opinion.


What if you had an existing payment agreement?


If you find, through no fault of your own, cannot make payments on your existing installment agreement or your offer in compromise agreement you can reach out to the IRS to request revised terms. The IRS may ask you to provide proof of changes in your financial situation by filling out a Collection Information Statement.


If you are asked to provide a Collection Information Statement (Form 433-A or 433-F) you will need to gather the following information:

1. Copy of your last tax return.

2. Income support (paystubs, social security, pension, self-employment support).

3. Bank statements (savings, checking, investment).

4. Monthly expenses (utilities, phone, internet, car payment, insurance).

5. Mortgage statements.

6. Health care and medical bills.

7. Proof of court ordered payments (child support, garnishments).

8. Copy of deeds for any real property owned.



The tax professionals at Flat Fee Tax Relief has a 96% Offer in Compromise success rate. The IRS will have an incentive to approve settlement offers, however, it will still need to be proven to them that the taxpayer has an IRS hardship worthy of a settlement.


Preparing and submitting this documentation and negotiating with the IRS is challenging.  It is important that the forms are complete and accurate to avoid a bank levy or garnishment.  If you need assistance with a tax liability that you believe is incorrect or that you cannot pay, you should seek help from an experienced tax professional with experience managing IRS collection matters. The tax professionals at Flat Fee Tax Relief have been providing valuable IRS tax debt help at a very affordable fee for more than a decade. Our tax pros are strategically located in Clearwater, Florida, and San Diego, California. This allows our teams to be available to clients and the IRS from 8 A.M. Eastern to 6 P.M. Pacific time. This is a tremendous advantage when stopping an IRS levy in one day. ARE YOU READY TO SETTLE WITH THE IRS?

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