Nearly 5 million taxpayers may receive a $1 billion tax benefit from the IRS’s temporary suspension of penalties. The waiver applies to 2020 and 2021 tax late payers. The reprieve lasts until April, but eligible taxpayers can save hundreds.
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Penalty Waiver Offers Relief to 5 Million Eligible Taxpayers
Due to the COVID-19 epidemic, the IRS suspended penalty fees. In April 2024, penalty enforcement will resume, giving taxpayers a limited chance to comply. In the early phases of the pandemic, taxpayers did not receive automatic mailed notifications, contributing to the penalty waiver.
This penalty waiver benefits taxpayers who only received initial notices of late payments and no automated reminders. The IRS stressed that those who did not fully pay their bills after the initial balance-due notices would continue to incur penalties.
The IRS determines penalty pause eligibility. About 5 million people, corporations, and organizations may qualify for this relief. Receivers must have late fines on 2020 and 2021 tax returns and owe less than $100,000 to the IRS. They must also earn less than $400,000 in either year.
Discover if You Qualify for a Tax Break
For the relevant years, taxpayers must have filed a 1040, 1041, 1120 series, or 990-T. The initial balance-due notice should have arrived between February 5, 2022, and December 7, 2023. Those who paid penalties for eligible years can get a refund.
In difficult circumstances, IRS Commissioner Daniel Werfel stressed that the IRS supports taxpayers. Pandemic conditions necessitated the penalty waiver. Tax experts say late payers have an opportune window to handle overdue fees from December to April, and many taxpayers may find relief.
