Category Archives: criminal tax law

“The IRS Is Taking Extraordinary Steps To Help The People Of Our Country,” Said IRS Commissioner Chuck Rettig.

“In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. During this difficult time, we want people working together, focused on their well-being, helping each other and others less fortunate.”

“The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes,” Rettig added “We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.”

These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. The IRS will be temporarily modifying the following activities as soon as possible; the projected start date will be April 1 and the effort will initially run through July 15. During this period, to the maximum extent possible, the IRS will avoid in-person contacts. However, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

“IRS employees care about our people and our country, and they have a strong desire to help improve this situation,” Rettig said. “These new actions reflect just one of many ways our employees are working hard every day to assist the nation. We care, a lot. IRS employees are actively engaged, and they have always delivered for their communities and our country. The People First Initiative is designed to help people take care of themselves and is a key part of our ongoing response to the coronavirus effort.”

More specifics about the implementation of these provisions will be shared soon. Highlights of the key actions in the IRS People First Initiative include:

Existing Installment Agreements – For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period.  By law, interest will continue to accrue on any unpaid balances.

New Installment Agreements – The IRS reminds people unable to fully pay their federal taxes that they can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. 

Offers in Compromise (OIC) – The IRS is taking several steps to assist taxpayers in various stages of the OIC process:

• Pending OIC applications – The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.
• OIC Payments – Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.
• Delinquent Return Filings - The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
• New OIC Applications – The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed to resolve outstanding tax liabilities by providing a “Fresh Start.”

Non-Filers–The IRS reminds people who have not filed their return for tax years before 2019 that they should file their delinquent returns. More than 1 million households that haven’t filed tax returns during the last three years are actually owed refunds; they still have time to claim these refunds. Many should consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute. Once delinquent returns have been filed, taxpayers with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.”

Field Collection Activities - Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

Automated Liens and Levies – New automatic, systemic liens and levies will be suspended during this period.

Passport Certifications to the State Department – IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during this period. These taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period. Certification prevents taxpayers from receiving or renewing passports.

Private Debt Collection – New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Field, Office and Correspondence Audits – During this period, the IRS will generally not start new field, office and correspondence examinations. We will continue to work refund claims where possible, without in-person contact. However, the IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.

• In-Person Meetings - In-person meetings regarding current field, office and correspondence examinations will be suspended. Even though IRS examiners will not hold in-person meetings, they will continue their examinations remotely, where possible. To facilitate the progress of open examinations, taxpayers are encouraged to respond to any requests for information they already have received - or may receive - on all examination activity during this period if they are able to do so.
• Unique Situations - Particularly for some corporate and business taxpayers, the IRS understands that there may be instances where the taxpayers desire to begin an examination while people and records are available and respective staffs have capacity. In those instances when it’s in the best interest of both parties and appropriate personnel are available, the IRS may initiate activities to move forward with an examination -- understanding that COVID-19 developments could later reduce activities for an agreed period.
• General Requests for Information - In addition to compliance activities and examinations, the IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this time if possible. 

Earned Income Tax Credit and Wage Verification Reviews – Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income. These taxpayers are encouraged to exercise their best efforts to obtain and submit all requested information, and if unable to do so, please reach out to the IRS indicating the reason such information is not available. Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information. 

Independent Office of Appeals – Appeals employees will continue to work their cases. Although Appeals is not currently holding in-person conferences with taxpayers, conferences may be held over the telephone or by videoconference. Taxpayers are encouraged to promptly respond to any outstanding requests for information for all cases in the Independent Office of Appeals.

Statute of Limitations - The IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period, taxpayers are encouraged to cooperate in extending such statutes. Otherwise, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.

Practitioner Priority Service – Practitioners are reminded that, depending on staffing levels and allocations going forward, there may be more significant wait times for the PPS. The IRS will continue to monitor this as situations develop.

“The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” Rettig said.

I ask for your personal support, your understanding, and your patience, as we navigate our way forward together. Stay safe and take care of your families, friends and others.”

Contact the Tax Lawyers at
Marini & Associates, P.A.  

The IRS has launched a webpage entitled Filing and Payment Deadlines Questions and Answers, which answers Filing, Payment Postponement Questions.

In Notice 2020-18 , the Treasury Department and the Internal Revenue Service (IRS) announced special Federal income tax return filing and payment relief in response to the ongoing Coronavirus Disease 2019 (COVID19) emergency.  This IRS webpage answers frequently asked questions related to the relief provided in the Notice.

These questions and answers will be updated periodically and are designed to be a flexible tool to communicate information to taxpayers and tax professionals in this changing environment. The answers to these questions provide responses to general inquiries and are not citable as legal authority. Accordingly, the Treasury Department and the IRS are continuing to consider additional IRB guidance on these issues addressed in these FAQs.

• No COVID-19 effect required. You do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief. You only need to have a Federal income tax return or payment due on April 15, 2020. (FAQ 2)
• Forms affected. The Notice postpones the filing and payment of Federal income taxes reported on the following forms:
• Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
• Form 1041, 1041-N, 1041-QFT
• Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
• Form 8960 (Net Investment Income Tax— Individuals, Estates, and Trusts)
• Form 8991 (Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts)
• With respect to Form 990-T, if that Form is due to be filed on April 15, then it has been postponed to July 15 under the Notice. For taxpayers whose Form 990-T is due on May 15, that due date has not been postponed under the Notice.
• With respect to returns due on March 16, 2020, which include Form 1065, Form 1065-B, Form 1066, and Form 1120-S for calendar year taxpayers, the filing of those returns has not been postponed. (FAQ 3)

• Non-April 15 due dates. Any taxpayers who have filing or payment due dates other than April 15 have not been granted relief at this time. (FAQ 5)
• Payroll and excise taxes. Under the Notice, normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes. (FAQ 6)
• Estate and gift taxes. Normal filing and payment due dates continue to apply to estate and gift taxes. (FAQ 7)
• Sec. 965(h) installment payments. The relief applies to Code Sec. 965 installment payments due on April 15, 2020. Although the Code Sec. 965(h) installment payment is generally made in respect of a taxpayer's 2017 or 2018 tax year, under Code Sec. 965(h)(2), the due date of the installment payment associated with a 2019 tax return is the due date of the taxpayer's 2019 Federal income tax return. For any taxpayer whose Federal income tax return filing due date has been postponed from April 15 to July 15, 2020, the due date of that taxpayer's Code Sec. 965 installment payment has also been postponed to July 15, 2020. (FAQ 8)

Estimated payments under BEAT.  For any taxpayer whose Federal income tax return filing deadline has been postponed from April 15 to July 15, 2020, the due date for Form 8991 and the Code Sec. 59A Base Erosion and Anti-Abuse Tax (BEAT) payment has been postponed to July 15, 2020. (FAQ 9)

Already filed and scheduled an April 15 payment.  A scheduled payment will not be automatically rescheduled to July 15. If you do nothing, the payment will be made on the date you chose. Here is information on how to cancel and reschedule your payment:

• IRAs. The Notice's relief applies to IRA contributions. IRA contributions for 2019 are due by the tax filing deadline. Thus, 2019 IRA contributions can be made by July 15. (FAQ 17)
• In addition, if a taxpayer owes a 10% additional tax on a 2019 IRA distribution, the reporting and payment of the 10% additional tax has been extended to July 15. (FAQ 18)
• Excess elective deferrals. Under Code Sec. 402(g), an employee can elect to defer a portion of compensation into an employer-sponsored plan. The maximum that can be deferred in 2019 was $19,000. Any excess elective deferrals (and income) have to be removed by April 15, 2020. The Notice does not extend this time. (FAQ 19)
• Employer contributions to qualified plans. In general, an employer contribution made to a qualified plan after the end of a tax year, but no later than the due date of the return for that tax year is considered to have been made on the last day of that year. (Code Sec. 404(a)(6)) This is sometimes referred to as the grace period.
• If an employer has a federal income tax return due date of April 15, then the Notice extends the grace period to July 15. (FAQ 20)

A district court has found in Maehr, (DC CO 2/28/2020) 125 AFTR 2d ¶2020-498, that Code Sec. 7345, which allows for a taxpayer's passport to be revoked if the taxpayer has a seriously delinquent tax debt, is constitutional because it bears a rational relation to a legitimate government interest, to wit, the collection of delinquent tax debts

Having a "seriously delinquent tax debt" is, unless an exception applies, grounds for denial, revocation, or limitation of a passport by the State Department. If the IRS determines that a taxpayer has a serious delinquent tax debt, it will "certify" that debt to the State Department. (Code Sec. 7345(a)) The State Department will then revoke the taxpayer's passport.

Once You’ve Resolved Your Tax Problem With The IRS,



The IRS Will Reverse The Certification Within 30 Days Of Resolution Of The Issue And Provide Notification To The State Department As Soon As Practicable.

• If you’re leaving in a few days for international travel, need to resolve passport issues and have a pending application for a U.S. passport, you should call 888 8TaxAid immediately.
• If you already have a U.S. passport, you can use your passport until you’re notified by the State Department that it has been revoked. 
• If your passport is cancelled or revoked, after you’re certified, you must resolve the tax debt by paying the debt in full, making alternative payment arrangements or showing that the certification is erroneous.