Posted on

People First Initiative: Installment Agreements (Part II)

Topic: People First Initiative: Installment Agreements (Part II)

For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Debit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.

Q. If necessary, what is the best way to suspend direct debit payments for a Direct Debit Installment Agreement (DDIA)?

A. Taxpayers should contact their bank directly to stop payments if they prefer to suspend direct debit payments during the suspension period. Banks are required to comply with customer requests to stop recurring payments within a specified timeframe. The following resources provide guidance on how to work with the bank to stop payments: · U.S. Department of the Treasury, Office of the Comptroller of the Currency, Answers about Automatic Withdrawals: How can I stop a pre-authorized debit from being paid from my checking account? · Consumer Financial Protection Bureau, How do I stop Automatic payments from my bank account?

IRS may be able to suspend certain single DDIA payments upon request, but due to disruptions caused by COVID-19 issues it may be difficult to reach an assistor. Note that if payments are stopped, in order to avoid possible default of the agreement once the suspension period expires on July 15, 2020, taxpayers must inform their bank to allow the debits to resume at least two weeks before their next payment is due.

(This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.)

(IRS FAQ – IRS.gov) (TTT 06/23/2020)