The IRS stated Tuesday it’ll waive penalty charges for individuals who didn’t pay again taxes that whole lower than $100,000 per yr for tax years 2020 and 2021.
Almost 5 million folks, companies and tax-exempt organizations — most making below $400,000 per yr — might be eligible for the aid beginning this week, which totals about $1 billion, the company stated.
The IRS quickly suspended mailing automated reminders to pay overdue tax payments throughout the pandemic, starting in February 2022, and company management says the pause in automated reminders is a motive behind the choice to forgive the failure-to-pay penalties.
“Due to the unprecedented effects of the COVID-19 pandemic, these reminders would have normally been issued as a follow up after the initial notice,” the IRS stated in an announcement.
“Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.”
Whereas the IRS plans to renew sending out regular assortment notices, the Tuesday announcement is supposed as one-time aid based mostly on the unprecedented interruption attributable to the pandemic, IRS officers stated.
“It was an extraordinary time and the IRS had to take extraordinary steps,” IRS Commissioner Daniel Werfel advised reporters. He stated the change might be computerized for a lot of taxpayers and won’t require extra motion.
Taxpayers are eligible for computerized aid in the event that they filed a Type 1040, 1041, 1120 sequence or Type 990-T tax return for years 2020 or 2021, owe lower than $100,000 per yr in again taxes, and acquired an preliminary balance-due discover between Feb. 5, 2022 and Dec. 7, 2023.
If folks paid the failure-to-pay penalty, they may get a refund, Werfel stated on a name with reporters. “People need to know the IRS is on their side,” he stated.
