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IRS Touts More Flexible Payment Arrangements to Boost Compliance

Posted on Oct. 21, 2020

The IRS is offering installment agreements without supporting financial statements to taxpayers owing up to $250,000 who can pay in full within the statutory time, a senior agency official said.

“That’s extraordinary,” said Darren Guillot, deputy commissioner for collection and operations support, IRS Small Business/Self-Employed Division. “That’s something we’re doing to help taxpayers, encourage them to file even if they have a large balance due . . . and get them back in compliance,” Guillot said October 20 at the virtual UCLA Extension Tax Controversy Institute.

The deals are only available to taxpayers who owe $250,000 or less in tax debt and are in the IRS notice stream but not yet assigned a revenue officer, Guillot said. Automated collection system cases should qualify, he added.

The installment agreements aren’t available to taxpayers with debts assigned to field collections, Guillot said, because those taxpayers are assumed to have already ignored multiple IRS notices.

Tax professionals and taxpayers “should be hearing something soon” about additional flexibility the IRS may be offering in collections, Guillot added.

“I can tell you that the automated liens [and automated levies] have not been turned back on,” although pre-pandemic policies on tax liens administered by field agents resumed October 1, Guillot said. “So, what message does that send?

“We’re not ignorant to how tough things are out there,” Guillot said. “This is an extraordinary time. . . . We don’t want to make things worse.”

Son Of ‘Hi-Def’

Guillot cited the coronavirus pandemic for many of the IRS’s current tax collection woes, but said agency enforcement is ready to spring into action.

Guillot in December 2019 announced the agency’s “Hi-Def” program — for high-income delinquent filers — to ferret out tax-delinquent rich people.

The IRS had planned to follow up on February and March Hi-Def revenue officer sweeps of geographical areas populated by high-income nonfilers, but the pandemic has prevented such advances, Guillot said.

“A significant number of the taxpayers that we contacted during those Hi-Def sweeps filed their returns,” Guillot said. “They paid all the amounts they owed, or they established a payment agreement.” Yet “a notable number” of delinquencies remain, he said.

“We had numerous more of those [Hi-Def] sweeps planned” beyond the early 2020 operations, Guillot said, before the pandemic took hold.

The remaining delinquent high-income nonfilers are expected to be swept up by the IRS’s “Surround Sound” program, which will delegate delinquent filers’ cases to audit, examination, or possible fraud investigations, Guillot said.

“But make no mistake: While we are prioritizing the health and safety of the public, as well as our employees right now, at the soonest appropriate time, these Hi-Def sweeps will expand,” Guillot said. “This is not a temporary part of our efforts.”

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