The IRS announced on Tuesday that for tax years 2020 and 2021, people who owe back taxes of less than $100,000 will not have to pay any penalty fees.
The agency said that starting this week, about 5 million people, companies, and tax-exempt organizations will be able to get the help. Most of them make less than $400,000 a year.
A tweet is embedded below related to this news-
This week, @IRSnews announced it will forgive $1 billion in underpayment penalties incurred during the pandemic for 4.7 million individuals, businesses, & organizations. Last Congress, I introduced the Taxpayer Penalty Protection Act of 2021 to provide relief for these penalties. https://t.co/JPn3o0NtjZ
— Judy Chu (@RepJudyChu) December 22, 2023
Starting in February 2022, the IRS stopped sending out automated reminders to pay past-due tax bills during the pandemic. The agency’s leaders say that the decision to waive the failure-to-pay fines is due in part to the break in automated reminders.
“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 said in a statement.
“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.”
Even though the IRS plans to send out regular collection notices again, the news on Tuesday was only meant to help for one time because of the pandemic’s unprecedented impact.
It was a very special time, and the IRS had to do very special things, said IRS Commissioner Daniel Werfel. He said that many people will not have to do anything else to make the change happen.
People who filed a Form 1040, 1041, 1120 series, or 990-T tax return for 2020 or 2021, owe less than $100,000 in back taxes each year and got their first notice of balance due between February 5, 2022, and December 7, 2023, can get automatic relief.
On a call with the press, Werfel said that people who paid the failure-to-pay penalty would get their money back. He said, “People need to know the IRS has their back.”
Stay tuned to our website silentnews.org for more updates.