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What You Need to Know About the People First Initiative

The global COVID-19 pandemic has presented significant challenges for American citizens from both the health and financial perspectives. Many individuals are looking for ways to reduce the financial impact of layoffs or furloughs they have experienced as a result of the shutdown in the economy.

In an effort to relieve some of this burden, the Internal Revenue Service introduced the People First Initiative on March 25, 2020.

The initiative outlines provisions for suspension of certain tax payments and reduction or suspension of IRS representative enforcement actions during this time.  The initiative is effective for the time period of April 1st, 2020 to July 15th, 2020 and covers a number of IRS processes.

Installment Agreements

An installment agreement is a payment plan set up with the Internal Revenue Service that allows you to pay your outstanding taxes over time.

For taxpayers who currently have an installment agreement with the IRS, payments will be suspended on their accounts between April 1st, 2020 and July 15th, 2020. In addition, installment agreements will not be considered to be in default during this time.

It is important to note that interest will continue to accrue during this time and all missed payments will be due once the extension period has expired.

Offer in Compromise

An offer in compromise is an agreement with the IRS that allows taxpayers experiencing financial hardship to settle their tax debts for less than the total amount owed. Depending on where a taxpayer is in the offer in compromise application process, there are several remedies available.

If you currently have an offer in compromise agreement, you may opt to suspend your payments owed between April 1, 2020 and July 15th, 2020. Similarly to installment agreements, interest will continue to accrue and any payments missed during the relief period will become due at the end of the extension timeframe.

If your application for an offer in compromise is still pending, you may have until July 15th in order to provide any additional requested information. The initiative also provides that applications for an offer in compromise may not be closed without the taxpayer’s permission during the covered period.

For those with delinquent tax filings for the 2018 tax year, these late filings will not result in a defaulted offer in compromise agreement if the outstanding tax returns are filed prior to July 15th, 2020.

Automated and Field Collection Activities

Collection activities including liens and levies will be halted during the initiative period in most cases. It should be noted, however, that Internal Revenue Service representatives will continue to pursue actions related to high-income taxpayers as necessary.

IRS Passport Certifications

The IRS will suspend the submission of passport certifications to the State Department for seriously delinquent taxpayers. These certifications seek to prevent taxpayers with severely outstanding tax liabilities from renewing or receiving a new passport.

IRS Collection Activity

During the People First Initiative coverage period, the IRS will cease forwarding taxpayer accounts to third party collection agencies.

IRS Audits

The IRS is modifying its policies related to conducting audits in light of the current coronavirus pandemic. Where possible, IRS agents will conduct their audits remotely and any in-person meetings will be suspended during this time, although taxpayers are still encouraged to respond to outstanding requests to the extent possible.

Some taxpayers may have received requests to verify their income information in order to confirm their qualification for the Earned Income credit. These individuals have until July 15th, 2020 to respond to this request.

While provisions have been made to provide taxpayers with financial relief during the initiative period, the statute of limitations on the Internal Revenue Service will still apply.

The IRS will take action to protect its interests should the expiration of the statute occur during this time.

While the People First Initiative can offer much needed tax relief during an unprecedented time in our country, it is important to look closely at the details of the provisions and how they may apply to your circumstances.

We can help you with understanding your current options.

The July 15th deadline is quickly approaching, but it isn’t too late to take action.

If you would like to learn more about the People First Initiative and how we can help sort out your IRS tax problems, please feel free to contact us for more information or to schedule an appointment.

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More About Us

Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)

Offices in Flemington, NJ and Califon, NJ

Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.

Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.

Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.

Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.

Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.

We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.

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