Washington— The IRS waived penalty penalties Tuesday for those who owed less than $100,000 in overdue taxes for 2020 and 2021.
The IRS said around $1 billion in assistance will be available to almost 5 million consumers, corporations, and tax-exempt organizations starting this week, most earning under $400,000.
Beginning in February 2022, the IRS halted issuing automated reminders to pay late tax bills during the epidemic, which has led to the forgiveness of failure-to-pay fines. The IRS stated that these reminders would have ordinarily followed the original notification because to the extraordinary COVID-19 epidemic.
Although these reminder messages were halted, taxpayers who did not completely pay their bills after the initial balance due notice still face the failure-to-pay penalty.
The IRS will start mailing collection letters, but the Tuesday statement is a one-time respite because to the pandemic's exceptional disruption, authorities said.
It was an extraordinary time and the IRS had to take extraordinary steps,” IRS Commissioner Daniel Werfel told reporters. He stated many taxpayers will automatically adjust without further effort.
Automatic relief is available to taxpayers who filed a Form 1040, 1041, 1120 series, or Form 990-T tax return for 2020 or 2021, owing less than $100,000 in unpaid taxes, and got an initial balance-due notice between Feb. 5, 2022 and Dec. 7, 2023.
Werfel told reporters they will obtain a refund for the failure-to-pay penalty. “People need to know the IRS is on their side,” he stated.