WASHINGTON (AP) — The IRS stated Tuesday it will waive penalty charges for individuals who did not pay again taxes that whole lower than $100,000 per yr for tax years 2020 and 2021.
Practically 5 million individuals, companies and tax-exempt organizations — most making beneath $400,000 per yr — might be eligible for the reduction beginning this week, which totals about $1 billion, the company stated.
The IRS briefly suspended mailing automated reminders to pay overdue tax payments in the course of the pandemic, starting in February 2022, and company management says the pause in automated reminders is a cause behind the choice to forgive the failure-to-pay penalties.
“Because of the unprecedented results of the COVID-19 pandemic, these reminders would have usually been issued as a comply with up after the preliminary discover,” the IRS stated in a press release.
“Though these reminder notices have been suspended, the failure-to-pay penalty continues to accrue for taxpayers who didn’t absolutely pay their payments in response to the preliminary steadiness due discover.”
Whereas the IRS plans to renew sending out regular assortment notices, the Tuesday announcement is supposed as one-time reduction based mostly on the unprecedented interruption brought on by the pandemic, IRS officers stated.
“It was a unprecedented time and the IRS needed to take extraordinary steps,” IRS Commissioner Daniel Werfel advised reporters. He stated the change might be automated for a lot of taxpayers and won’t require further motion.
Taxpayers are eligible for automated reduction in the event that they filed a Kind 1040, 1041, 1120 sequence or Kind 990-T tax return for years 2020 or 2021, owe lower than $100,000 per yr in again taxes, and obtained an preliminary balance-due discover between Feb. 5, 2022 and Dec. 7, 2023.
If individuals paid the failure-to-pay penalty, they’ll get a refund, Werfel stated on a name with reporters. “Folks must know the IRS is on their facet,” he stated.
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