Top #5 things to note about the extended Tax deadline July 15-2020 from April 15-2020 which is just round the corner

Top #5 things to note about the extended Tax deadline July 15-2020 from April 15-2020 which is just round the corner

Top #5 things to note about the extended Tax deadline July 15-2020 from April 15-2020 which is just round the corner

Millions and millions of Americans have been affected by the deadly coronavirus whose impact is worsening further day-by-day. Americans are facing health problems, losing their sources of income and are facing a very difficult time. In such bad times, the Federal Government has been quite supportive and has taken up various initiatives by which the economic stress of the Americans would be reduced.

One of the major initiatives taken by the Federal Government to reduce the economic burden on the Americans affected by the pandemic COVID-19 is the extension of the tax return filing and the tax payment deadline to 15th July 2020 by the IRS. This extension in tax filing deadline is applicable for all taxpayers i.e. both residents and non-residents and including individuals, corporations, estates, trusts, and other non-corporate tax filers as well. 

Let us know about the major five things about this tax deadline extension provided by the Federal Government.

a.Extension for filing tax return and tax payment

This extension offered by the IRS is applicable both for filing Federal tax return and Federal tax payment. Originally, the Federal Government was about to give the deadline until 15th July 2020 to pay the taxes along with penalties and interest. However, the rules have been modified due to the economic stress caused due to the pandemic COVID-19. But, those taxpayers who are expecting their tax returns must file them soon to obtain the refunds faster.

b.Eligibility for availing the extended deadline

According to the IRS, there are is no such eligibility criteria for a taxpayer to avail the extended deadline. Any person who has a pending Federal Income Tax payment or returns due for 15th April 2020 can avail of the relief of deadline extension. This extended timeline is also applicable for the estimated Federal Tax Income payment 2020. This timeline extension is only applicable for those payments or return filing due on 15th April 2020 and not due on any other date.

c.State tax laws

There are a large number of states who have also extended their timeline for Federal income tax return filing and payment dates to 15th July 2020 as that of the Federal Government. States such as Alabama, Arizona, Kansas, Ohio, South Carolina, District of Columbia, West Virginia, Michigan, New Jersey, Montana, Oklahoma, Minnesota, Kentucky, Wisconsin, Maine, Georgia, Illinois, California, Colorado, and many more have their tax return filing and payment extended up to 15th July 2020. 

However, there are some states like Hawaii, Idaho, Iowa, and Virginia which have extended their timelines differently than that of the Federal Government. The timeline in Hawaii has been extended to 20th July, in Idaho has been extended up to 15th June 2020, in Virginia had been extended up to 1st June 2020 and up to 31st July 2020 in Iowa.

d.Inability to pay by 15th July 2020

In case a taxpayer feels that he would not be able to pay his Federal Income tax even by the extended timeline i.e. 15th July 2020, then he would have to file for an automatic extension. The taxpayer must request for the automatic extension of the timeline by 15th July 2020. He can be able to request for the extension automatically by e-filing using Form-4868. Moreover, if business entities or trusts would be interested in filing for an extension, then it can be done electronically through the Form-7004.

 

e.IRA and HSA

 Since the deadline for filing tax returns and tax payment has been extended till 15th July 2020; the taxpayers can make contributions to their IRA and HSA up to 15th July 2020.

 

Additional Information

However, there are some other items whose deadlines have been extended until 15th July 2020. 

  1. The Estimated Federal Tax payment for the second quarter has also been extended till 15th July 2020 which was 15th June 2020 earlier. So, by this, the taxpayers would have to now submit both the Estimated Federal Tax payments for both the 1st quarter and the 2nd quarter by 15th July 2020.
  2. The partnership return filings and the corporate return filings have been extended till 15th July 2020.

Hence, the extended timeline for making the Federal tax payment, filing the Federal tax returns, and even payment of State Tax is almost round the corner and taxpayers should be prepared for it from now.

All you need to know about State-specific Tax deadlines and COVID-19

All you need to know about State-specific Tax deadlines and COVID-19

All you need to know about State-specific Tax deadlines and COVID-19

The pandemic COVID-19 has affected the economic lives of the Americans in a very adverse manner. The Federal Government and the State Government have taken initiatives to reduce the stress of the Americans by bringing up numerous changes in the tax laws.

The Federal Government has extended the deadline for filing tax returns and also payment of taxes to 15th July 2020. There are some states which have aligned to the changes in the Federal tax laws and have extended their deadlines as well. However, there are some other states which are still charging interest on the non-payment of taxes on time.

 

Let us know about the changes in some of the State-specific tax deadlines made due to the outbreak of COVID-19.

a.Alabama

1.Alabama has postponed the tax returns filing and payment date from 15th April 2020 to 15th July 2020 for the below-mentioned categories of taxes.

  • Individual Income Tax
  • Excise Tax for financial institutions
  • Corporate Income Tax
  • Business privilege Tax

2.These tax reforms include relief on the payment of tax on self-employment income and the estimated income tax for the year 2020.

3.Penalties for the late payment of Sales and Use tax have been waived for small businesses. 

 

b.Alaska

  •  The Alaska Legislation has extended all tax returns and payments administered by the Alaska Revenue Tax Division due for 15th April 2020 until 15th July 2020.
  • No penalties or interest would be charged for the late payment of the taxes during this period.

c.Arizona

  • In Arizona, the deadline for the filing of tax returns and payment of State Income Tax due on 15th April 2020 has been extended to 15th July 2020.
  • This extension in the deadline is applicable for individuals, corporations, and fiduciaries.

d.Hawaii

  •  In Hawaii, the taxpayers who are due to file their State Income Tax returns or pay the State taxes from 20th April 2020 to 20th June 2020 can do that by 20th July 2020.
  • This extension is applicable only for the Hawaii income tax return filing and payment; and not applicable for estimated income tax payment, franchise tax, withholding tax, general excise tax or public service company tax.

 

e.Georgia

  •  The Governor of Georgia has announced that there would be an extension in the deadline for filing of Georgia’s income tax returns.
  • The new deadline has been determined as 15th July 2020 which is per that of the federal deadline.

f.Idaho

  •  The deadline for filing Idaho’s Income Tax returns has been extended till 15th June 2020.
  • In this case, it is advisable to complete both Federal and State tax return filing by 15th June 2020 so that the returns can also be obtained on time.

 

g.North Carolina

  • In North Carolina, the deadline for filing state tax return has been extended to 15th July 2020.
  • But, interest would be charged on any tax payment which is made after 15th April 2020. So, taxpayers should pay their tax soon to avoid being charged with interest. 

 

h.Virginia

  •  The Virginian State Government has extended the State Income Tax return filing date to 1st May 2020. 
  • However, interest would be levied on any late payment of State Income Tax which is due within 1st April to 1st June 2020. It is advisable to file the returns and even pay the taxes soon.

 

i.New Jersey

  • In New Jersey, the timeline to file and pay the individual gross income tax, corporation business tax, and partnership tax for the year 2019 has been extended until 15th July 2020.
  • This extension of the deadline is also applicable for the 1st quarter estimated tax payments.

However, all other payments of tax and filing of returns remain de on their original date which also includes the 2nd quarter estimated tax payments.

j.New Hampshire

  • According to the New Hampshire Department of Revenue Administration, there would be no changes in the deadlines for payment and returns of business profits tax, business enterprise tax or any other tax which is administered by the Department.
  • The interests on non-payment of taxes would be charged from 15th April 2020 onwards.

 

 

k.Montana

  • Montana has made an extension in the deadline for the filing of tax returns and for the payment of individual State income tax to 15th July 2020.
  • There has also been an extension in the deadline for making the payment of the 1st quarter estimated tax payments to 15th July 2020.

Hence, these are some of the States which have made certain changes in their tax laws for bringing some relief to the Americans. However, for detailed information on the State tax law changes the State tax Consultant must be consulted.

State and Local Tax relief laws for COVID-19

State and Local Tax relief laws for COVID-19

State and Local Tax relief laws for COVID-19

The novel coronavirus (COVID-19) is spreading rapidly with a huge toll on the lives of common people and the global economy as well. In the US, the number of people being affected by the COVID-19 is on an increase and has reached around 4 lakhs now. The number of people who have died due to COVID-19 in the US is approximately around 11,000. Similarly, many people have even lost their livelihoods due to the closing or the downfall of several businesses.

However, Tax relief laws the Federal Government has been extremely considerate towards the sufferings of the common people and has taken several initiatives for providing some relief to them. The income tax payment and return filing deadline for the taxes due on 15th April 2020 has been postponed to 15th July 2020 by the IRS. Also, several new laws have been implemented by the Federal Government for the support of individuals, small and medium scale businesses even. The Coronavirus Aid, Relief and Economic Security Act (CARES), Families First Coronavirus Response Act, Stimulus Package, etc. are some of the major initiatives taken by the Government for providing support and assistance to people. 

Tax relief laws by State Government  

In the US, the tax rules and laws associated with the Federal Government and the State Government are different from each other. In this distressful period, the State Government of different states of the country has announced various changes and new rules related to the tax laws.

Let us talk about some of the major tax relief laws imposed by the State Government in the different states to deal with the economic disruption caused by COVID-19.

Alabama

  • In Alabama, the Revenue Department has announced on provisions for tax relief to small businesses that would not be able to pay their Sales tax for February, March, and April. Those small retail businesses whose monthly sales in the previous year have been $62500 or less on average can have the liberty to file their sales tax return for February, March, and April without paying the State Sales tax. There will be a waiver of late tax payment penalties for these small retail businesses through 1st June 2020.
  • The deadline for motor vehicle registration and vehicle property tax payment for March 2020 has been extended through 15th April 2020. Moreover, tax relief would be available for State lodgings tax account holders who are unable to make their payment for February-April 2020.
  • The due date for payment and filing returns for 2019 Income tax and 2020 estimated Income tax which were due on 15th April 2020 has been extended to 15th July 2020.

California

  • The Income Tax deadline for return filing, payment for 2019 and 2020 estimated tax payments Quarter 1 and Quarter 2 has been extended to 15th July 2020. This is also applicable for 2020 LLC taxes, fees, and 2020 non-wage withholding payments. 
  • The Californian Employment Development Department (EDD) has declared that the employers in the State who have been impacted by COVID-19 can request a delay of up to 60 days in filing their State payroll reports or in the deposit of their payroll taxes without the payment of any penalty. The employers must provide a written request for this extension within 60 days of the original tax filing/payment due date.
  • Moreover, there has been an announcement on the deferral of business taxes for supporting small businesses that have been affected by the COVIS-19.

Connecticut

  • The Department of Revenue Services in Connecticut has extended the deadlines for filing the annual tax returns due on or after 15th March 2020 and before 1st June 2020 to 15th June 2020.
  •  Also, the tax payments which are associated with these tax returns have been extended to the due date available in June.
  • The personal income tax return filing deadline has been extended to 15th July 2020 and this extension is also applicable for estimated tax payments of 2020 Quarter 1 and Quarter 2.

Columbia

  • For income tax returns, the deadline for tax payment and return filing which was due on 15th April 2020 has been extended to 15th July 2020.
  • In the District of Columbia, penalties/interest will be waived for the failure of sales tax payment for a period that ends on 29th February 2020 or 31st March 2020 if all the taxes are paid completely on or before 20th July 2020. This waiver does not apply to hotels or motels which can defer property tax under another emergency legislation. 
  • This legislation states that hotels/motels can avail penalties waiver for the delay in payment of the property tax’s first installment of 2020 if the installment is paid by 20th June 2020.

Texas

  • In Texas, the Comptroller has declared that the sales tax collected in March 2020 would be remitted and would be available for emergency health care and other emergency operations for the people.
  • The Texan Comptroller has also insisted on the businesses in the State to make use of short term payment agreements for meeting the deadline of March 2020. 

Massachusetts

  • The Department of Revenue in Massachusetts has implemented an emergency regulation amendment. According to this amendment, the sales and use tax return filing and payment which are due for the period of 20th March 2020 to 31st May 2020 will remain suspended. These tax return filing and tax payments would be now due for 20th June 2020. 
  • Marijuana retailers, marketplace facilitators or motorcycle vendors are not included within this amendment. Any penalties or interest would be waived but the accumulation of statutory interest will continue.

Virginia

  • In Virginia, the Department of Taxation has announced that all the income tax payments which are due from 1st April 2020 to 1st June 2020 can be paid at the Department anytime on or before 1st June 2020. If all the payments are received by 1st June 2020, then the Department would waive all penalties for late payment otherwise penalties would start accumulating from the original payment due date. 
  • However, interest would also keep accruing from the original due date of payment. Some of the taxes which are eligible for this extension and waiver are individual, fiduciary and corporate income taxes and any estimated income tax payments in this period.  The State provides an automatic filing deadline extension for all the taxpayers for six months.  Also, the Department of Taxation would consider requests for sales tax dealers who would request an extension in the sales tax payment and return filing which was due on 20th March 2020 and would extend it till 20th April 2020.

Montana

  • The Montana Revenue Department would assess the situation of taxpayers on a case-by-case basis and might permit the deferral of tax payments for up to one month at an instance. 
  • The taxpayers must contact the Tax Collection Bureau by email, phone or mail at least one week before the actual due date of payment for making a deferral request.
  • The 2020 estimated tax payments for the first quarter have been extended to 15th July 2020 and the second quarter payment is also due on 15th July 2020.

Conclusion

Hence, along with the Federal Government, these are some of the tax relief laws/rules implemented by the different states. Taxpayers can communicate with their respective State tax agencies for complete details on the amendments made in their respective tax laws for COVID-19. These rules and amendments in State tax laws would act as a support for the distressed individual taxpayers or businesses in coping up with the economic disruptions.

References

https://tax.thomsonreuters.com/news/tax-relief-offered-by-states-and-localities-in-response-to-covid-19/?utm_campaign=T_CPE_NSL_9017597_covid19news_20200406_PR_EM1&utm_medium=email&utm_source=Eloqua&site_id=82769734&cid=9017596&chl=em&sfdccampaignid=7014Q000002SW4xQAG&elqTrackId=8432E59EA486AE4E4F693C86C8DF092E&elq=1fca5b09cc9e4a48adaa952eec158059&elqaid=22686&elqat=1&elqCampaignId=16486

https://www2.deloitte.com/us/en/pages/tax/articles/covid-19-state-and-local-tax-due-date-relief-developments.html  

 

Everything you need to know about tax relief implemented for the ongoing coronavirus disease 2019

Everything you need to know about tax relief implemented for the ongoing coronavirus disease 2019

Everything you need to know about tax relief

implemented for the ongoing coronavirus disease 2019

The dreadful coronavirus disease has taken a toll on the global economy. Businesses are suffering from losses and employees are losing their jobs. In such a situation, tax compliance is an additional factor of stress on the common people and business entities as well. In such difficult times, the US Government has taken an initiative and introduced certain changes to federal tax laws. 

Extension in federal tax deadlines

 The US Department of Treasury and the IRS issued Notice 2020-17on 18th March 2020. According to the guidelines of this notice, there has been an extension in the deadline for payment of federal income tax or federal tax return. Any taxpayer having a federal income tax payment or federal income tax return due on 15th April 2020 can file the returns by 15th July 2020. This extension of 90 days has been provided by the IRS without charging any penalties or interest for late filing. This tax relief is applicable for all taxpayers who include individual, trust, estate, partnership association, corporation, etc. 

The affected taxpayers do not need to file the forms Form 4868 or Form 7004. Also, there is no limitation on the amount of payment that might be postponed. This relief on taxes is applicable for the Federal Income tax and Federal tax return of 2019 and for the estimated federal income tax payment of 2020 which were due on 15th April 2020. However, no extension has been announced for the filing of any other type of federal income tax or federal tax return.

Extension in State tax deadlines 

The majority of the States have agreed to the tax changes implemented by the Federal Government and have responded accordingly. However, there are some states which have responded differently to these tax changes implemented by the Federal Government. Taxpayers can obtain all information related to the changes in State tax laws from their state tax agencies.

Contributions to IRA

With the changes in the deadlines for tax payment and filing of tax returns for the federal tax, the deadline for making contributions to IRA has also been extended. The deadline for making contributions to the IRA has been also extended to 15th July 2020. This extension of 90 days for making contributions to the IRA has been provided by the IRS without charging any penalties or interest.

Taxpayers can contribute a maximum amount of $6000 towards their IRA and if the taxpayer is above the age of 50 years then there can be an additional contribution of $1000.This is an excellent opportunity for the taxpayers to save more for their retirement if they have not done so. 

Contributions to HSA

Along with the extension made in filing federal tax payments and federal tax returns up to 15th July 2020, the deadline for making contributions to HSA has also been changed to 15th July 2020.

In case if the taxpayer is having a high –deductible health insurance plan with an HSA then he can add up to $3500 if he has self-only coverage. This amount can be increased to $7000 in case of family health plans. In the case of the taxpayer being above the age of 55, a contribution of an additional $1000 can be made into the account.   

The stimulus package and

Families First Coronavirus Response Act

The Stimulus package will help the taxpayers in obtaining stimulus checks. These stimulus checks would of amount $1200 for the individual taxpayers, $2400 for those who are filing tax returns jointly and $500 for each qualifying child. These payments related to the stimulus package would be done by using the tax information of the taxpayers based on their recent tax filings. The amount which would be paid would be reconciled on the next year’s tax return based on the taxpayer’s situation in 2020.

The Families First Coronavirus Response Act helps in providing relief to the individual taxpayers as well as self-employed individuals and small businesses. The eligible employees who have been impacted by the coronavirus would receive emergency sick leave and paid sick leave.

Under FMLA (Family Medical Leave Act), if an employee needs to be quarantined, took care of a family member who was quarantined or took care of minor children whose schools/child care centers are closed due to COVID-19 can avail 12 weeks of job-protected leave. Also, if an employee is himself seeking medical supervision or is being quarantined then he would be eligible to receive two weeks paid sick leave and two-thirds pay for the care of the family member/child. 

Furthermore, self-employed taxpayers and small business owners can obtain tax credits for providing paid sick leave and emergency family medical leave to the employees. Self-employed taxpayers can obtain a tax credit which is equivalent to the qualified sick leave amount whereas they can obtain a refundable tax credit equivalent to 100% of a qualified family leave amount. Small business owners are eligible to obtain refundable tax credits equivalent to 100% of both the qualified paid sick leave and qualified family leave wages.

Conclusion

 Hence, with the implementation of these tax relief strategies by the US Government the stress of the taxpayers would be reduced up to some extent until things return to square one.

References

  1. https://www.irs.gov/pub/irs-drop/n-20-18.pdf
  2. https://blog.turbotax.intuit.com/tax-news/families-first-coronavirus-response-act-everything-taxpayers-need-to-know-about-the-new-relief-bill-46430/
  3. https://blog.turbotax.intuit.com/tax-news/is-the-tax-deadline-delayed-what-to-know-about-coronavirus-covid-19-and-your-taxes-46320/

 

How high deductible health plans would help in providing cover against COVID-19 expenses?

How high deductible health plans would help in providing cover against COVID-19 expenses?

How high deductible health plans would help

in providing cover against COVID-19 expenses? 

Lately, people across the world have been struggling hard to combat the dreadful effects of the pandemic COVID-19. The number of deaths occurring due to coronavirus is on an increase and is also leading to an increase in the fright of the common people. Any symptoms of the COVID-19 and there have to be several tests, quarantining without any idea about what the future holds.Amidst all this chaos, the US Government has taken some very necessary steps to lessen the stress among common people. Extension in the tax return filing and tax payment deadlines, extension in the deadline for making contributions to IRA and HSA, Tax stimulus package, Families First Coronavirus Response Act, etc. are some of the major changes implemented by the US Government to bring some relief to the impacted taxpayers. Another major initiative taken by the US Government for helping the common people is the implementation of testing /treatment of COVID-19 by HDHP with no deductible or sharing of the cost.

What is a High Deductible Health Plan (HDHP)?

What is a High Deductible Health Plan (HDHP)?

A high deductible health plan (HDHP) is a type of health insurance plan which has a lower premium in a month and a higher deductible. HDHPs are more affordable by common people in terms of their monthly premiums. Since the name suggests, high deductible health plan; it implies that the deductible for the health plan is high than that of a traditional healthcare plan. However, by the time the policy holder reaches the annual deductible, he would be covered 100% for the rest part of the calendar year. 

A high deductible health plan is suitable for those policyholders who are quite healthy and rarely visit the doctor. In these types of cases, HDHP is an excellent option to cut expenses and it is a better option rather than going without health insurance. However, it should be kept in mind that the policyholder must set aside a considerable amount of liquid savings which would help in covering the deductible and the out-of-pocket expenses.

How does a High Deductible Health Plan work?

How does a High Deductible Health Plan work?

The minimum deductible in an HDHP is $1350 for an individual whereas it is around $2700 for a family. The out-of-pocket expenses for an HDHP are limited to $6650 for an individual and $13300 for a family. To offset the cost of the HDHP it is necessary to open a Health Savings Account (HSA). The HSA offers a tax-advantaged method by which healthcare costs can be saved.  

There is a limit on the annual contribution which can be made to the HSA; it helps in rolling over the balance from one year to another. It is ideal for a policyholder to contribute the amount of deductible of HDHP into the HSA so that there are enough funds to cover the medical expenses.

HDHPs and expenses associated with COVID-19

HDHPs and expenses associated with COVID-19

The US Government issued a notice i.e. Notice 2020-15 which states that a health plan which satisfies the requirements to be a high deductible health plan (HDHP) shall not fail to be an HDHP if it provides health benefits related to the testing of COVID-19 and its treatment. This testing and treatment of COVID-19 by the HDHP would be available without a deductible or with a deductible which is below the minimum deductible. So, the evident implication from this notice is that an individual who is covered under the HDHP will still be an eligible individual who might make tax-favored contributions to an HSA.                     

The Notice 2020-15 also states that all the medical care services received and the materials purchased for the testing of COVID-19 which are provided by a health plan which is either without a deductible or with a deductible that is below the minimum deductible needed for a health plan to be HDHP should be disregarded.

The relief provided by the Notice 2020-15  

The relief provided by the Notice 2020-15  

This notice does not modify any of the requirements or conditions which are needed for a health plan to be an HDHP other than the relief related to the testing/treatment of COVID-19. However, vaccinations would continue to be considered as preventive care materials for determining if a health plan is an HDHP or not.

So, if a policyholder is availing a health plan with no deductible or less deductible than the minimum annual deductible needed to be an HDHP for testing/treatment of COVID-19 he would still make contributions to the HSA which can help in tax relaxation.

Conclusion

Hence, this effort by the US Government for providing some relief to the affected citizens is commendable and would be helpful for the citizens in these times of distress.

References

  1. https://www.irs.gov/pub/irs-drop/n-20-15.pdf
  2. https://www.thebalance.com/what-is-high-deductible-health-insurance-2385898

 

How business entities would obtain benefits from the suspension of tax compliance programs by the IRS?

How business entities would obtain benefits from the suspension of tax compliance programs by the IRS?

How business entities would obtain benefits from

the suspension of tax compliance programs by the IRS?

Tax Compliance programs by the IRS has been taking a series of steps related to tax legislation as an effort to alleviate the stress common people are facing due to the outbreak of COVID-19. The rapidly spreading COVID-19 has led to the reduction in sales, slowdown of businesses, people being laid off from their jobs and huge economic adversities. In such a chaotic situation, the IRS’s initiatives on the suspension of tax compliance would act as a boon for the taxpayers, especially for the business entities. 

How business entities would obtain benefits from the suspension of tax compliance programs by the IRS.One such major initiative taken by the IRS is the implementation of the “People First Initiative” which would help in providing relaxation to those business entities who are facing uncertainties related to their taxes.

People First Initiative

The People First Initiative includes the postponement of certain payments that are associated with the installment agreements and offers in compromise.According to IRS, these measures included under the People First Initiative would start from 1st April 2020 onwards and would continue up to July 2020.The major changes which have been included in the People First Initiative are the postponement of the payments which are related to the Installment Agreements, the Offers in compromise, Audits, and other enforcement activities.

Installment Agreements

  • The IRS has announced that it has suspended the existing installment agreements that were due in between 1st April and 15th July 2020. Those taxpayers who are not able to comply with the terms of the installment agreement can suspend their payments due during this period. The IRS would also not consider any installment agreement of this period as a defaulter. However, the interest would be accruing on the unpaid balances. 
  • Also, the IRS has made provisions by which taxpayers either individuals or business entities who would not be able to make payment for their federal taxes can take the help of the monthly payment agreement by the IRS.

 

Offers in Compromise (OIC)

  1. The taxpayers who have pending OIC can provide additional information for support till 15th July 2020. Without the consent from taxpayers, IRS would not be closing any OIC which is pending before 15th July 2020.
  2. Taxpayers who have accepted OICs can suspend their payments until 15th July 2020. However, interest would be levied on the accrued balances which are unpaid.

 

3.Those taxpayers who are delinquent in the filing of their tax return for the year 2018, the IRS would not issue an OIC as a defaulter for them.

 4.Any delinquent returns of the tax year 2018 must be filed by the taxpayers either before or on 15th July 2020.

Automated Liens

and

Levies

According to the regulations of the IRS, no new automatic liens and levies would be carried out till 15th July 2020.

 

Activities related

to field collection

  • All activities related to liens, levies and any seizures associated with a personal residence that are initiated by the field revenue officers will be suspended till 15th July 2020. 
  • The field revenue officers will, however, continue to perform seizures and similar activities for high-income non-filers whenever needed.

 

Passport Certifications to the State Government and Private Debt Collection

  1. For the seriously delinquent taxpayers, the IRS would provide Passport certifications to the State Government. This procedure has been suspended currently till 15th July 2020.
  2. Moreover, new delinquent accounts will also not be forwarded by the IRS to the other private collection agencies for working on them until 15th July 2020.

Field, Office and other correspondence audits

  1. Any in-person field, office or correspondence audits will not be carried on till 15th July 2020. There can be audits or examinations remotely by the examiners of the IRS. Taxpayers should also co-operate with the IRS and provide all information that is requested for faster tax processing. 
  2. There might be some situations in which the taxpayers might be interested in the examination or audit. If the audit or examination is beneficial for the parties and the required IRS personnel are available then the audits/examination can start.

 

 

Refund claims

The IRS would continue to work on the processing of the refund claims without making any in-person contact.

Earned Income Tax Credit and

Wage Verification Reviews

  • The taxpayers have time till 15th July 2020 for responding to the IRS that whether they qualify for the EITC or their income has to be verified. 
  • Through 15th July 2020, taxpayers will not be denied these credits if they have a failure in providing the requested information.

 

Independent Office of appeals

The Office of appeals would be continuing to work on their cases. There might be a conference which would be held by telephone or through videoconferencing. For all the cases of the Independent Office of appeals, the taxpayers should promptly respond to any request made for information.

Statute of limitations

There would no disruption in the protection of the statute limitations by the IRS. The taxpayers are encouraged to co-operate with the IRS in extending those statutes whose expirations may be jeopardized. Otherwise, notes of deficiency would be issued by the IRS to protect the interests of the Government in the preservation of these statutes.

Conclusion

Hence, with these several changes being implemented by the IRS in the tax regulation the plight of the individual taxpayers and business entities would reduce by a considerable amount. With these tax relaxations and suspensions, business entities are sure to cope up with the losses that have been incurred due to the outbreak of COVID-19.  

References

https://tax.thomsonreuters.com/news/irs-suspends-certain-compliance-programs-due-to-covid-19/

https://www.forbes.com/sites/kellyphillipserb/2020/03/25/irs-will-ease-tax-payment-guidelines–limit-collections-activities-during-covid-19-crisis/#5a8cdb9c4dca

https://www.forbes.com/sites/robertwood/2020/03/25/irs-eases-installments-due-slows-audits-sweeping-relief-puts-people-first/#2eb525c93855

https://www.accountingtoday.com/news/irs-suspends-key-tax-compliance-and-enforcement-programs-to-adjust-covid-19-effort