The Internal Revenue Service (IRS) announced that taxpayers can begin paying taxes on their 2023 earnings starting January 29. (iStock)
The Internal Revenue Service (IRS) has waived nonpayment penalties for eligible taxpayers affected by the 2020 and 2021 collection notice suspension. This penalty reduction will benefit nearly 5 million taxpayers, resulting in an estimated $1 billion in tax relief.
During the COVID-19 pandemic, the IRS has temporarily stopped mailing automatic reminders for delinquent tax payments. These reminders should typically be issued as a follow-up after the initial notification. Although dunning notices were suspended, nonpayment penalties continued to accrue for taxpayers who did not pay their bills in full in response to the initial balance notice.
The agency said it will make the adjustments in phases for the accounts of individuals, businesses, trusts, estates and tax-exempt organizations. The reduced fines primarily apply to people with annual incomes of less than $100,000.
The IRS plans to adjust eligible individual accounts, followed by business accounts in late December to early January, and then trusts, estates, and tax-exempt organizations in late February to early March 2024.
For eligible taxpayers, the relief is automatic and you do not need to do anything. Taxpayers who qualify for relief but have already cleared their balances will receive a refund or credit payment for their unpaid taxes. Unpaid fines for eligible taxpayers will resume from April 1, 2024.
“As the IRS prepares to return to regular collection mail, we were concerned that taxpayers who haven't heard from them in a while could suddenly be hit with a large tax bill,” IRS Commissioner Danny Warfel said. . statement. “The IRS should be looking out for taxpayers, and this penalty reduction is a common sense approach to helping people in this situation.”
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The 2024 tax season is almost here
The IRS announced it will officially begin on Monday, January 29th. 2024 tax season When the agency will begin accepting and processing 2023 tax returns. For most taxpayers, the deadline to file an individual federal tax return, pay any unpaid taxes, or request a filing extension is Monday, April 15, 2024.
Taxpayers in Maine and Massachusetts have until April 17 to file their taxes due to Patriot Day and Emancipation Day holidays. people living in Federally Declared Disaster Area It may take longer to submit.
The agency expects more than 128.7 million individual tax returns to be filed by the April 15, 2024 tax deadline. Most taxpayers will receive their refund within 21 days, with many receiving their refund by February 27th.
“Some returns may require additional review and may take additional time,” the IRS said.
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IRS to offer unique tax filing services in 2024
The IRS is rolling out a pilot Direct File program this year to allow eligible taxpayers to file their 2023 federal tax returns online and directly to the IRS for free. The program will be rolled out in stages and is expected to be widely available in mid-March.
Residents of 12 states are eligible to participate if they meet certain criteria. Four states are working with the IRS to integrate state taxes into their testing programs: Arizona, California, Massachusetts, and New York. Taxpayers from nine other states with no income tax are also participating: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
“Taxpayers will continue to see significant improvements in IRS operations in upcoming filing seasons as our transformation efforts take hold,” Werfel said. “IRS employees are working hard to ensure that new funds are used to help taxpayers by making the process of preparing and filing taxes easier.”
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