The COVID-19 pandemic has disrupted everyone’s lives and has caused chaos worldwide. However, for the IRS, times are getting even more stressful. The tax season is currently in full swing. Around 70 million individual tax returns remain unprocessed for 2020’s tax year. Yet, the IRS has approximately 20,000 fewer employees than a decade ago.
Now, with COVID-19 assistance laws and the CARES Act, the IRS will be taking on a vital and urgent job. These laws require the agency to distribute several of the stimulus package benefits, including the distribution and determination of stimulus payments. Not only that, but it will also need to make significant changes to the system it uses for returns processing. The new relief provisions for coronavirus have led to many tax code changes. And the agency must now accommodate these changes.
Changes to IRS Operations
The IRS is now struggling to maintain business as usual through this international crisis. Remote working capabilities are in the process of being introduced for many employees. However, these take time to implement, so operations cannot get back to normal yet.
While the IRS has provided taxpayers with stimulus payments before, the COVID-19 provisions are more complex and implementation must take place more rapidly. This puts the organization is under more strain than at any other time.
What can you expect from the IRS during the current situation?
Use the Website
Even under standard conditions, IRS operations cannot handle a massive influx of questions about stimulus payments. Taxpayers must use the IRS.gov website first to get the information they need. The agency will soon provide online tools to enable taxpayers to supply bank information to facilitate IRS bank deposit payments.
Limited Live Assistance
If you need live assistance, it is important to note that the IRS phone lines will not be working for a few weeks. The agency has also closed its Assistance Centers indefinitely. Many of the IRS hotlines will be nonoperational. However, there is no need to worry about enforcement activity and missed deadlines. The agency has suspended all compliance activities through July 15. Even when COVID-19 is no longer a threat, it will likely be challenging to reach the IRS. A backlog of questions and issues will tie up resources for a considerable amount of time.
The IRS has announced that it will suspend new audits until after July 15. It is likely that the agency will stop questionable or suspicious refunds until the taxpayer can verify the return.
Temporary Reprieves on Back Taxes
The agency has paused enforcement of IRS collection through July 15. It has also put passport restrictions, levies, and liens temporarily on hold.
No Monthly Installment Agreements
Taxpayers will not need to make monthly payments on IRS installment agreements between April 1 and July 15. Those paying by direct debit may struggle since the IRS is not suspending direct debits.
File Your Tax Return as Normal
Most of the stimulus payments the IRS will distribute will come from your 2019 filed returns. If you have not yet filed your back tax returns, it is a good time to do so. If you have not filed before, you may now need to if you are to obtain your stimulus payment.
Stimulus Payments Cannot Pay Tax Debts
The IRS will not apply stimulus payment amounts against any balance you owe this tax season. The only exception to this is to pay delinquent child support obligations.
For more information about this article, please contact our tax professionals at firstname.lastname@example.org or toll free at 844.4WINDES (844.494.6337).