The IRS unexpectedly announced $1 billion in penalty relief for 4.7 million people, mostly those earning less than $400,000.
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IRS Waives Penalties for Late Taxes: COVID Relief for Taxpayers
The IRS made this startling action for a purpose. The extraordinary COVID-19 outbreak forced the IRS to temporarily stop issuing automated reminders for unpaid tax payments in February 2022. These reminders usually follow the initial notice.
According to a news release, taxpayers who hadn’t fully settled their bills after the initial notice continued to accrue the failure-to-pay penalty.
Due to this “unusual situation,” the IRS will waive 2020 and 2021 failure-to-pay penalties. This waiver should save taxpayers $206 for each return, they predict. Business accounts will be adjusted from late December to early January, while eligible individual accounts have already been adjusted. Late February to early March 2024 will affect trusts, estates, and tax-exempt organizations.
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Penalty Relief a Smart Help for Taxpayers
IRS Commissioner Danny Werfel expressed concern for taxpayers who may face higher tax bills following an extended communication gap. Penalty relief is a smart way to help people. Werfel said the IRS actively helps taxpayers with late invoices and has payment choices.
The relief news gives many taxpayers an unexpected holiday gift of financial relief at a time when such gestures are especially valuable. It shows the IRS’s knowledge of the pandemic’s specific circumstances and its commitment to helping taxpayers. The IRS offers practical solutions and support during difficult times including penalty relief and ongoing efforts to help those with late invoices.
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