The Internal Revenue Service (IRS) has announced that it will ofer penalty relief to approximately 4.7 million individuals and corporations that didn’t receive automated collection reminder notices during the COVID-19 pandemic. Keep reading to learn more.
Penalty Relief: What You Need To Know
The IRS announced that it will offer penalty relief to about 4.7 million individuals, businesses, and tax-exempt corporations that didn’t receive automated collection reminder notices due to the disruptions caused by the pandemic.
In total, the agency expects to provide about $1 billion in penalty relief, with most of it going to taxpayers who make under $400,000 a year.
Starting from February 2022 the IRS temporarily stopped mailing notices reminding tax payers to pay overdue taxes. The failure-to-pay penalties, however, continue to accrue, which can result in substantial tax bills.
How To Take Advantage of the Penalty Relief?
This penalty relief is automatic, so eligible taxpayers are not required to take any action.
If you already paid the failure-to-pay penalties related to the 2020 and 2021 tax years, the IRS will issue a refund or credit the payment you made toward other outstanding tax debts.
Note that the penalty relief only applies to eligible taxpayers with assessed tax under $100,000.
Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations that filed certain Forms 1040, 1120, 1041 and 990-T income tax returns for tax years 2020 or 2021, with an assessed tax of less than $100,000, and that were in the IRS collection notice process — or were issued an initial balance due notice between Feb. 5, 2022, and Dec. 7, 2023.
The IRS estimates tha five million tax returns are eligible for the penalty relief.
JT Tax Services: Taxes Made Easy
When it comes to taxes, knowledge is power. That’s why at At JT Tax Services, we give you the peace of mind that comes with knowing that you are working with experienced professionals with in-depth knowledge of all applicable tax laws and regulations.
We are located in Oxnard, California, contact us today by email (firstname.lastname@example.org), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services. Feel free to contact us today!