IRS Resumes Tax Collection Programs Suspended Due to COVID-19

During the COVID-19 pandemic, many individuals, families, and businesses have experienced financial difficulties, and to help avoid additional strain that would affect the national economy, the IRS temporarily suspended some of the activities it usually takes to collect unpaid taxes. However now that the United States is emerging from this national emergency with many businesses reopening and people returning to work, the IRS has stated that it will be resuming its regular collection programs. Taxpayers who are facing tax audits or who have unpaid taxes will need to be aware of the potential types of actions that the IRS may take against them.

IRS Tax Enforcement Operations

As of June 15, 2021, the IRS has begun to return to its normal practices of collecting taxes. Typically, the IRS sends notices to taxpayers who have tax debts, informing them of the balance that is due. The IRS will be following up with those who have not responded to these notices. Those who have tax liabilities from tax returns filed for 2019 or 2020 are required to respond to notices from the IRS within 30 days, either by paying the amount due or requesting an offer in compromise or other forms of relief. This window is extended to 45 days for those who reside outside the United States. Beginning August 15, 2021, anyone who has failed to respond to a notice from the IRS may be subject to tax liens or levies.

Other tax levy programs will resume on July 15, 2021, including:

• Federal Payment Levy Program (FPLP) - The IRS may intercept payments made to a taxpayer from the federal government through the Bureau of Fiscal Service (BFS). These payments may include certain types of Social Security benefits, Medicare payments to providers or suppliers, retirement annuities for federal employees, military retirement benefits, payments to federal contractors, and some types of federal employee salaries.
• State Income Tax Levy Program (SITLP) - The IRS may intercept a taxpayer’s state income tax refunds. After receiving notice that a state tax refund is being seized, a taxpayer will have the opportunity to appeal the levy.
• Municipal Tax Levy Program (MTLP) - The IRS may intercept a refund that a taxpayer receives for municipal or city income taxes. A taxpayer will receive a notice of this type of levy that will inform them that they have a right to a hearing to contest the levy.
• Passport revocation - The IRS may send a notification to the Department of State (DOS) that a taxpayer has seriously delinquent tax debts, and the DOS may exercise its right to revoke the taxpayer’s passport.

Contact Our San Jose Tax Attorney

If you are being audited by the IRS, if you have unpaid taxes, or if you have been notified that the IRS will be taking collection actions against you, John D. Teter Law Offices can help you understand your options. We will provide you with representation and work to find solutions that will fit your needs. Contact our San Jose, CA tax lawyer today by calling 408-866-1810.