Page 13 - The Suffolk Lawyer - March 2021 - Vol. 36, No. 2
P. 13

IRS Relief for Taxpayers Facing

                                     COVID-19 Financial Struggles

                                                  By Karen Tenenbaum, Esq., LL.M. (Tax), CPA of Tenenbaum Law

                  ast year, the IRS instituted several measures to aid taxpayers Online access for Direct Debit Installment Agreements
                  struggling to pay their taxes as a consequence of COVID-19.           Qualified taxpayers may now be able to use the Online Payment
            L Since most of those expired in the fall, the IRS made addi- Agreement system to propose lower monthly payment amounts and
            tional changes in November providing expanded payment options change their payment due dates.
            and other relief. These are important because there are provisions
            covering taxpayers with new tax issues as well as those with an ex- Automatic addition of certain new tax year balances
            isting payment plan.                                                        For individuals and out of business entities, the IRS will automat-
                                                                                     ically include certain new tax year balances to existing Installment
            Installment Agreement Relief                                             Agreements so these taxpayers can avoid default of the agreement.
               Installment agreements (IAs) allow taxpayers to pay their tax
            debts over time. There are several different types of IAs each with Offers in Compromise
            its own rules. Changes made by the IRS include the following:               An Offer in Compromise (OIC) allows taxpayers to settle their tax
                                                                                     debts for less than the full amount owed. The financial struggles
            Extended time to pay                                                     many taxpayers are now facing may make this an ideal time to sub-
               Taxpayers with short-term payment plans have been granted 180         mit an OIC. Further, the IRS has indicated it is willing to work with
            days to pay instead of 120 days.                                         taxpayers unable to meet the terms of their existing OIC due to
                                                                                     COVID-related economic hardship. However, with any OIC, it is im-
            Simplified Installment Agreement process                                 portant to prepare appropriate financial documentation because the
               Individuals who owe less than $250,000 may be able to set up                                                       (Continued on page 26)
            Installment Agreements without providing the usual financial docu-
            mentation if their monthly payment proposal is sufficient and has                               Karen Tenenbaum ESQ.
            not yet been assigned to a revenue officer.                                                     LL.M (Tax) CPA
                                                                                                             Karen Tenenbaum, Esq., is Founder and Managing Partner
            Modified qualifications for Installment Agreements                                              of Tenenbaum Law, P.C. (, a tax law
                                                                                                            firm in Melville, N.Y., which focuses its practice on the reso-
               For individuals who were notified of taxes owed with liabilities up                          lution of IRS and New York State tax controversies. Karen
            to $250,000 for Tax Year 2019 only, the IRS can offer one Install-                             can be reached at and at 631-
            ment Agreement opportunity with no lien filed.                                             465-5000.

            MARCH 2021 EDITION • The Official Publication of the Suffolk County Bar Association • THE SUFFOLK LAWYER 13
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