In response to COVID the federal government has been making almost daily announcements with new essential information that is useful to taxpayers, we will try and keep you informed as it comes out.
- First, the IRS and Department of Labor recently announced two new payroll tax credits available to businesses that pay sick pay to employees unable to work due to COVID or caring some COVID affected. The credit is dollar for dollar and offsets your 941 deposit. Details to come.
- Second, the IRS has announced the “Peoples First Initiative”, here are some of the relevant features.
- Installment Agreements- Payments due between April 1st and July 15th for taxpayers on existing agreements will be suspended. However, this could be problematic if you are paying through direct bank debit agreement. I am not confident that the IRS would automatically stop this. I would suggest calling your bank. After July 15th if you want to renegotiate the terms of your payment agreement you can, no questions asked. Note, that if you have been laid off from work, or have suffered a severe decline in income you might have better options available to you such as OIC of CNC.
- Offers in Compromise (OIC) – OIC’s that are pending will have until July 15th to provide additional supporting documentation. Payments due on accepted OIC’s are suspended until July 15th and lastly the IRS will not default an OIC for an unfiled 2018 income tax return.
- Tax Liens and Levies; in general, all liens and levies will be suspended during this period from either Revenue Officers or from Automated collections.
- Audits: The IRS will not initiate any audits during this period.
- Appeals: Appeals division will continue to hear cases; however, this will be done by phone or video conferencing, face to face meetings have been suspended.
- Contacting the IRS: The IRS has closed their offices and most employees are working from home. We have been trying to call the IRS this past week and have been unable to get through. Their fax machines are not receiving transmissions. This is problematic and hopefully will change.
- 2019 IRA contributions deadline: normally due on 4/15/20 has been extended to 7/15/20.
- Stimulus Payments: On Friday I reported about some of the details of the Stimulus Package. It has passed and approved by Congress. In the next 3 weeks the IRS will start issuing these payments to eligible taxpayers. Note that you must have filed a 2019 or 2018 tax return in order to qualify and there are income limits. If you have not filed your return you should contact my office immediately.
- Michigan Deadline Extension: Today Governor Gretchen Whitmer issued Executive Order 2020-26 which pushes the deadline for all State and City returns and payments due in April to July 2020. There was no comment about Q1 estimates getting delayed too.
We at Franskoviak Tax Solutions will continue to keep you up to date in regards to the latest news. If you have a question that you would like answered in regards to the latest tax news please contact our Michigan IRS tax resolution experts at (248) 524-5240.