For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. If you can’t pay the terms of an Installment Payment Agreement, you may suspend payments during this period. The IRS will not default any Installment Agreements during this period. But, interest will continue to accrue on any unpaid balances.

Will direct debit payments continue to be deducted from my bank for Direct Debit Installment Agreements (DDIAs) during the suspension period?

A. Yes. The IRS will continue to debit payments from the bank for Direct Debit Installment Agreements (DDIAs) during the suspension period. However, if you can’t pay your Installment Agreement you may suspend payments during this period. Installment agreements will not default due to missing payments during the suspension period through July 15.

What is the best way to suspend direct debit payments for a Direct Debit Installment Agreement (DDIA)?

A.  You should contact your bank directly to stop payments during the suspension period. Banks are required to comply with customer requests to stop recurring payments within a specified time frame. 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. In order to avoid possible default of the agreement once the suspension period expires on July 15, 2020, you must inform their bank to allow the debits to resume at least two weeks before their next payment is due.

If you need assistance with an installment plan or offer in compromise with the IRS, contact us for a free consultation. We are doing phone and video calls during the Coronavirus Pandemic.