Wednesday, July 22, 2020

IRS is Gradually Ramping-Up Enforcement

On July 15, 2020 we posted IRS Is Back, Fully Staffed & Resuming Issuing Tax Notices, Tax Liens & Tax Liens where we discussed that the Internal Revenue Service is recalled about 46,000 of its employees furloughed by the government shutdown, nearly 60 percent of its workforce; with the IRS being fully staffed on or before July 15, 2020 and that the IRS has reopen facilities in remaining states on July 13 with an emphasis on telework with plans to continue to encourage it, where possible, for the foreseeable future to ensure social distancing. 

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  1. IRS Commissioner sets out priorities in IRS forum speech

    In his opening remarks at the IRS Nationwide Tax Forum, IRS Commissioner Charles Rettig set out some near-term priorities for IRS.

    The Commissioner noted that its focus regarding resuming its operations is on:

    ...Processing paper returns and other items in its backlog of mail;

    ...Providing toll-free customer service phone lines, including the Practitioner Priority Line; and

    ...Reopening Taxpayer Assistance Centers (TACs). All TACs are scheduled to reopen by the end of July, but with limited access. To start, the reopened TACs will be by appointment only.

    The Commissioner also noted that IRS will be prioritizing activity with respect to tax shelters, syndicated conservation easements, and microcaptive insurance arrangement

  2. IRS addresses taxpayer contact and lien procedures as collections resume
    SBSE-05-0720-0055 (July 16, 2020)

    In an internal Memo, the IRS has provided temporary guidance to its employees regarding taxpayer contact and Notices of Federal Tax Lien (NFTL) procedures as its employees resume collection work after the COVID-19 shutdown.

    Background. On March 30, 2020, in response to the President’s declaration of a national state of emergency due to the COVID-19 pandemic, the IRS’s Small Business and Self-Employed (SB/SE) division suspended certain collection activities. The suspension period expired on July 15, 2020. (SBSE-05-0320-0030) See IRS's SB/SE division suspends some collection activities through July 15 (04/06/2020).

    Temporary guidance. SB/SE has now provided its employees with temporary guidance on taxpayer contact and NFTL procedures as collection activities that were suspended in March 2020 resume.

    Taxpayer contacts. The new guidance provides that generally face-to-face public contact/field activities will only occur when authorized and will be voluntary on the part of the SB/SE employee.

    Face-to-face contact requires Territory Manager authorization and is subject to the following guidelines:

    Face-to-face contact between an SB/SE employee and the public may be authorized only when:

    there are no effective alternatives to face-to-face contact, and the failure to act poses a risk of permanent loss to the government, such as the expiration of a statute, assets being placed permanently beyond government reach, or continued pyramiding of employment tax liabilities; or

    the taxpayer or representative has requested face-to-face contact, and the RO and manager agree that face-to-face contact would advance the progress of the case.

    In all instances of public contact, the Memo requires SB/SE employees to wear masks or other face coverings, practice social distancing, and adhere to CDC guidelines (hand washing, etc.) to guard against possible exposure to or spread of COVID19.

    SB/SE employees should, when possible, consider conducting any face-to-face meetings with a taxpayer in an IRS facility (such as Taxpayer Assistance Centers) equipped with plexiglass barriers.

    The Memo also notes that SB/SE employees in areas subject to a federal, state or local government quarantine or isolation order related to COVID-19 are not allowed to make face-to-face contact, even in exigent circumstances, with taxpayers, POAs or third parties.

    Tax lien filings. Generally, SB/SE employees should extend the deadlines for deciding whether to file an NFTL beyond August 31, 2020, and new NFTLs filings continue to be suspended through August 31, 2020.

    New NFTLs should only be requested for exigent circumstances and must be approved by the Territory Manager or Director, Specialty Collection – Insolvency. An exigent circumstance involves the loss of opportunity for the government to collect taxes due, such as the taxpayer placing assets beyond the reach of the government.