IRS Announces Moratorium on Collection Activity Until July 15, 2020

To assist taxpayers during these challenging times, the IRS recently announced a moratorium on most collection activities until July 15, 2020. During this time (April 1, 2020 – July 15, 2020) the IRS will suspend the following collection actions: (i) all scheduled monthly payments under existing installment agreements with IRS, (ii) new lien filings, (iii) new automatic, systematic levies, (iv) existing levies previously initiated by field revenue officers, (v) passport revocations and (vi) in-person meetings with taxpayers (i.e., showing up at your house and flashing their Treasury Department badge).

So if you currently have an installment agreement with the IRS you do not need to make your monthly payments for the next three months. Although interest will continue to accrue on your outstanding balance, your failure to make these monthly payments during this moratorium period will not constitute a default under your IRS installment agreement. Regarding direct debit installment payments being deducted directly from a taxpayer’s bank account, it looks like the IRS is taking steps to stop these automatic, recurring bank account debits during the moratorium period.

For some reason the IRS is taking a different approach with recurring wage garnishments that were already in place at the time the moratorium was announced. Here, some IRS revenue officers are addressing existing wage garnishments on a case-by-case basis and insisting that the taxpayer prove economic hardship before lifting these garnishments. This case-by-case policy is not consistent with the recent IRS press release, which makes no mention of taxpayer hardship as a prerequisite for lifting existing levies. There is no basis for treating wage garnishments differently than regular installment payments or other types of levies under the current moratorium. As such, any refusal to release an existing wage garnishment should be challenged by going over the revenue officer’s head and appealing to his/her group manager and/or territory manager and, if necessary, opening a case with the Taxpayer Advocate Service.