Tax Challenges & Disputes Update

April 10, 2020

As the COVID-19 pandemic continues to impact our lives, federal and state taxing authorities understand the challenges individuals and businesses are facing, and have issued guidance and a variety of updates.

IRS Announces “People First Initiative” to Address Tax Challenges Related to COVID-19

The IRS has temporarily modified the following activities beginning April 1 through an initial date of July 15.

Installment Agreements

• For existing installment agreements, payments due between April 1 and July 15, 2020 are suspended. The IRS will not default any installment agreements during this period of time.

IRS Collection Activities

• Liens and levies (including seizures of a personal residence) initiated by field revenue officers are suspended, with exceptions where warranted to pursue high income non-filers and to perform other similar activities.
• New automatic, systemic liens and levies are suspended through July 15, 2020.

IRS Examinations and IRS Appeals

• The IRS will generally not begin any new field, office, or correspondence exams through July 15, 2020, unless necessary to preserve the applicable statute of limitations.
• 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.
• IRS Appeals will continue to work cases, with conferences held either via telephone or by videoconference. Taxpayers are encouraged to promptly respond to outstanding requests for information in all Appeals matters.
• Additional information is available at the IRS website.

Tax Relief for New York Businesses impacted by COVID-19

• If you are a quarterly or annual sales tax vendor, and you were unable to file or pay your March 20, 2020, sales tax return due to COVID-19, you may be eligible to apply to have penalty and interest waived. You can apply through the Tax Department’s website at: https://www.tax.ny.gov/press/alerts/sales-tax-relief-for-covid-19.htm

Tax Relief for New York City Businesses impacted by COVID-19

• Business and Excise tax returns – Penalties will be waived for late-filed returns originally due between March 16 and April 25. Taxpayers may request to have the penalties waived on a late-filed extension or return, or in a separate request. Interest owed will not be waived. If you paper-file, write “COVID-19” on the top center of the first page.

For more information related to tax challenges and disputes, contact a member of the Tax Team at Farrell Fritz.