Are you representing clients in an IRS examination or have any been recently contacted regarding an audit? A “kinder, gentler” IRS is making it easier to resolve these matters during the COVID-19 pandemic.

Are you representing clients in an IRS examination or have any been recently contacted regarding an audit? A “kinder, gentler” IRS is making it easier to resolve these matters during the COVID-19 pandemic.

According to a new memorandum sent on July 10 to field collection employees from Hank Kea, Field Collection director of the Small Business/Self-Employed Division, the IRS will continue to rely on remote contact between its employees and taxpayers for the vast majority of its cases. It says that face-to-face meetings and field activities will only be required in exceptional cases. Invasive audits will be at a minimum.

More details: IRS revenue officers work on cases involving tax debts or delinquent tax returns. If a taxpayer is affected by a disaster, the revenue officer can use “soft contact” procedures to reach out to them about tax debts. This means approaching the taxpayer with caution and extreme sensitivity to their personal circumstances.

IRS agents have been instructed to consider stress and fatigue even when the taxpayer didn’t experience any personal, monetary or physical damage from the disaster.

Due to the COVID-19 outbreak, the IRS has halted field revenue officer enforcement actions. In the meantime, field agents will operate remotely for routine activities.  They may be permitted to conduct essential face-to-face activities on a voluntary basis, only when necessary and appropriate and only with territory manager concurrence.

This might include making field contacts to view assets, serving a summons, taking necessary and appropriate investigative and enforcement actions and conducting interviews with taxpayers, their designated representatives or third parties at their homes or business locations (when there no reasonable alternatives).

The memo further spells out guidelines for those rare instances when face-to-face meetings may be authorized.

• There is no effective alternative to face-to-face contact and a failure to act poses a risk of permanent loss to the government (e.g., expiration of a statute, assets being placed permanently beyond government reach or compounding payroll taxes; or
• The taxpayer or representative has requested face-to-face contact and the IRS agent and manager agree this would advance the case.

In all instances of public contact, employees are expected to wear masks or other face coverings, practice social distancing, and adhere to CDC guidelines (handwashing, etc.) to guard against possible exposure to or spread of COVID-19.

The memo stresses that agents must apply “good judgment” in determining if public contact is needed. They should use soft contact procedures to determine the impact of the health crisis on the taxpayer. Finally, the memo states that revenue officers still have discretion to handle unusual situations and hardship issues.

The ball is in your court: Take advantage of these lenient rules to wrap up audit-related issues for your clients in a reasonable and expeditious manner. Give your clients a chance to breath a little easier during these trying times.