The Internal Revenue Service (IRS) announced a new fine relief for approximately 4.7 million peopletax-exempt businesses and organizations that were not sent automated collection reminder notices during the pandemic.
With this initiative, the IRS will provide around $1 billion in fine relief. Most of those who will receive the benefit earn less than $400,000 a year.
The tax agency points out that due to the unprecedented effects of the Covid-19 pandemic, temporarily suspended sending automated reminders to pay overdue tax bills starting in February 2022: “These reminders would normally have been issued as a follow-up after the initial notice. Although these reminder notices have been suspended, the nonpayment penalty continues to accrue for taxpayers who did not pay their bills in full in response to the initial balance due notice.”
Given that situation, the IRS is taking several steps before resuming normal collection notices. for tax years 2020 and 2021to help taxpayers with outstanding tax bills, including some people who haven’t received a notice from the IRS in more than a year.
To assist taxpayers as normal processes resume, the IRS will issue a special reminder beginning in January 2024. The letter will alert the taxpayer of their responsibility, easy ways to pay, and the amount of their payment responsibility, if applicable. The IRS urges taxpayers to cannot pay the full balance owed to visit IRS.gov/payments to make arrangements to resolve your bill.
The IRS is also taking steps to eliminate nonpayment penalties for eligible taxpayers affected by this situation for the 2020 and 2021 tax years.
Exemption from fines is automatic
The ISR indicated that eligible taxpayers they do not need to take any action to obtain it. Eligible taxpayers who have already paid their balance in full will also benefit from the relief; If a taxpayer has already paid nonpayment penalties related to their 2020 and 2021 tax years, the IRS will issue a refund or credit the payment toward another outstanding tax liability.
Penalty relief only applies to eligible taxpayers with taxes assessed below $100,000. Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations.
“The IRS wants to help taxpayers and provide them with easy options to deal with outstanding tax bills and avoid additional interest and penalties,” said IRS Commissioner Danny Werfel.
“People who receive these notices should remember that they often options that can help them establish an automatic payment plan are overlooked or catch up on your tax returns. “Making additional improvements in the collection area will be an important focus for the IRS going forward as we continue and accelerate our transformation work,” Werfel added.
For more information, go here.
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