The IRS declared on Tuesday that certain people who were subject to late-payment penalties for tax years 2020 and 2021 will now have those penalties waived.
Taxpayers who owed less than $100,000 and were in the IRS collection notice process or received an initial balance due notice between February 5, 2022, and December 7, 2023, will have their fees waived. This waiver will be automatically applied, so eligible persons do not need to take any action to benefit from the relief.
The IRS made this decision because late payment reminders were suspended in February 2022 due to the pandemic. Although taxpayers received an initial notice of their bill, no follow-up reminders were sent. However, the tax penalty kept accumulating despite the lack of follow-up notices, according to the IRS.
In January 2024, the agency will begin the distribution of personalized reminder letters to inform filers about their existing liabilities, available payment methods, and the potential relief on penalties, if applicable.
In an official statement, IRS Commissioner Danny Werfel expressed concern about taxpayers who have not received any communication from the IRS recently and may be surprised by a significant increase in their tax bill. He emphasized the importance of the IRS safeguarding taxpayers' interests and said that the penalty relief being offered is a practical solution to assist those facing this issue.
According to the IRS, approximately 4.7 million people, businesses, trusts, estates, and tax-exempt organizations are eligible for this penalty relief. This relief is estimated to save taxpayers a total of $1 billion, equating to an average of $206 per return.
According to NBC News.
