As everyone is aware, COVID-19, also known as the novel coronavirus, has caused great turmoil in our lives. Along with the obvious issues such as the virus pandemic itself and significant job loss, there have been many overlooked consequences of the pandemic such as difficulty paying bills. One of those bills no one has been paying attention to has been the inability to pay one’s taxes to the Internal Revenue Service (i.e., IRS). Now, the IRS has reduced staff significantly because of the COVID-19 pandemic and has shifted its focus to ensure the stimulus payments from the CARES Act are distributed. The IRS has also extended tax deadlines and held off collection activities for the time being.
However, as the July 15th deadline approaches, the IRS may ramp up collection practices and begin issuing liens and levies once more whether you have unpaid taxes or have fallen behind on an IRS payment plan. If you are one of the many who have been negatively impacted financially due to COVID-19, this could ultimately lead to home foreclosures, bank seizures, and confiscations of personal property to pay the IRS tax debt. Such potential outcomes can happen whether the tax debt is personal or a business-related tax debt. Remember, federal government debt is not dischargeable at bankruptcy.
Even though you have an unpaid tax debt with the IRS and/or have fallen behind on a payment plan with the IRS, you still have hope thanks to the Fresh Start Initiative launched by the IRS. The Fresh Start Initiative requires the IRS to negotiate a balance that you can actually pay and enter into a payment plan based on that amount negotiated if you qualify. Whether or not you have been negatively impacted by the novel coronavirus, you can take advantage of this program with the IRS.
If you’re not sure if you qualify for the Fresh Start Initiative or not sure if the COVID-19 pandemic has negatively impacted you sufficiently to obtain a reduced tax debt, please give us a call. We will review your tax information and determine what options you have available in order to reduce your IRS tax liability.
If you have any questions, please contact us here. We also recommend viewing our webinar here.