The coronavirus disaster has turned the nation the wrong way up and compelled thousands and thousands of Individuals into unemployment. Fortunately, the Inner Income Service (IRS) has finished its half to make the method of submitting and paying taxes lots simpler on the general public. Here is an outline of how the company has eased the burden on taxpayers through the pandemic.

1. A delayed submitting deadline

Usually, taxes are due on April 15 yearly until that day falls on a weekend or vacation. In that case, the deadline is pushed again by a day or so. This 12 months, the IRS gave filers an additional three months to not solely file their tax returns, but additionally submit any funds associated to them.

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2. Curiosity on tax refunds

Delaying the 2020 tax deadline to July 15 was an act of goodwill on the a part of the IRS. When the coronavirus outbreak actually exploded in mid-March, numerous Individuals had been scrambling to purchase meals and hold secure, and lots of did not have the capability to are likely to their taxes. The truth that Individuals had been additionally given till July 15 to pay their 2019 taxes was useful, given the fast monetary influence of the pandemic.

One disadvantage of a delayed tax-filing deadline, nonetheless, was that many individuals who had been owed cash did not submit their returns till July 15. As such, numerous financially determined Individuals held up their very own refunds and let the federal government hold onto their cash for longer than mandatory.

Fortunately, the IRS stepped up on this regard by providing to pay curiosity on delayed tax refunds. Usually, the company just isn’t chargeable for curiosity on refunds once they’re issued inside 45 days of both the tax-filing deadline or the date a return is definitely filed — whichever comes later. This 12 months, nonetheless, the company has been paying curiosity on tax refunds courting again to April 15, even for returns filed a lot later. In different phrases, a return due a refund submitted on July 15 was entitled to a few months of curiosity.

Moreover, the rate of interest the IRS paid was pretty beneficiant. Refunds issued between April 15 and June 30 earned 5% curiosity, compounded day by day, whereas refunds issued between July 1 and Sept. 30 earned 3% curiosity, additionally compounded day by day.

3. Help for tax filers who cannot pay

The IRS has taken steps to make it lots simpler for filers who owe cash on their 2019 taxes to repay that cash. To be clear, the IRS already had choices in place to assist individuals handle a tax debt. For instance, it is lengthy been potential for filers to enroll in an installment settlement and pay a tax invoice over time, slightly than arising with all the cash directly.

This 12 months, nonetheless, the IRS’s new Taxpayer Aid Initiative is making life even simpler on those that owe cash. For one factor, taxpayers who qualify for a short-term cost plan now have as much as 180 days to settle their tax payments as a substitute of the 120 they’d usually get. The IRS can also be providing extra flexibility to taxpayers who cannot make their funds below a beforehand accepted provide in compromise (an association whereby the IRS agrees to just accept a decrease quantity than the precise tax invoice owed).

The company can also be including extra versatile phrases to its installment agreements. Those that owe lower than $250,000 in tax debt can arrange an installment settlement with out offering a monetary assertion or substantiation if the sum of money they suggest to pay every month is affordable (a willpower the IRS will finally make). And a few taxpayers who solely owe cash for the 2019 tax 12 months and owe lower than $250,000 might qualify for an installment settlement with out a discover of federal tax lien. Usually, this lien is put in place to guard the IRS’s curiosity within the property and belongings of somebody who owes cash in case that filer would not make good on an installment settlement, however this 12 months, that step could also be waived.

The IRS may even mechanically add sure new tax balances to present installment agreements to streamline the compensation course of. In different phrases, a filer with an settlement already in place from a earlier tax 12 months might have his or her 2019 tax debt tacked onto that settlement mechanically. Lastly, certified taxpayers with present direct-debit installment agreements could possibly use the company’s on-line payment-agreement system to suggest decrease month-to-month funds and alter cost due dates to replicate their present monetary circumstances.

Throwing taxpayers a bone

The IRS would not precisely have a repute of being a people-friendly company, however this 12 months, it is actually stepped as much as make life simpler on taxpayers through the pandemic. And whereas we do not know what lodging the IRS will put into place for 2021, it is truthful to imagine that if the well being and financial disaster continues to rage on into the upcoming 12 months, the company will as soon as once more make changes to ease the burden on the taxpaying public.