Millions of Americans will receive a $1 billion late fee waiver from the IRS. This benefit is accessible to almost 5 million taxpayers till April.
IRS Waives Late Payment Penalties for 2020 and 2021 Taxes, Effective Immediately but Ending in April 2024
Individuals who missed 2020 and 2021 tax payments had their penalty fines temporarily suspended. Starting immediately, the IRS will waive late payment penalties. Importantly, these fines will continue in April 2024.
In the early phases of the COVID-19 pandemic, taxpayers did not receive automatically sent reminders, therefore some merely received initial late payment letters. Due to the pandemic’s unprecedented consequences, these reminders would have generally followed the original warning, according to the IRS.
People may have missed penalty warnings during the years the IRS waived penalties. Despite the suspension of reminder notices, taxpayers who did not fully pay their bills after the initial balance-due notice have been charged the failure-to-pay penalty.
IRS Grants Penalty Pause: Up to 5 Million Eligible for Tax Relief on Late Fees
About 5 million people, corporations, and organizations may qualify for this penalty pause. Receivers must have late fines on their 2020 and 2021 tax returns, owe less than $100,000 to the IRS, and earn less than $400,000 in each year. Tax forms 1040, 1041, 1120, and 990-T are eligible.
Taxpayers must get an initial balance-due notification between February 5, 2022, and December 7, 2023. Members who paid fees for eligible years should be reimbursed for penalty.
The IRS is on the side of the people and had to take extraordinary measures during the pandemic, said Commissioner Daniel Werfel. Tax experts recommend the period from December to April for late payers to catch up on overdue fees during this penalty respite.