Approximately 5 million taxpayers who are behind on their 2020 and 2021 taxes will have approximately $1 billion in penalties waived by the Internal Revenue Service (IRS).
The IRS announced Penalty reduction In December, it targeted taxpayers who had unpaid taxes but were not sent automatic collection reminder notices during the pandemic. No notices were issued in 2020 and 2021, but non-payment penalties were imposed on taxpayers who did not pay their bills in full.
“As the IRS prepares to revert to regular collection mail, we were concerned that taxpayers who had not heard from them in a while would suddenly be charged a large amount of tax.The IRS should look out for taxpayers. “And this reduced penalty is a common sense approach to helping people in this situation,” IRS Commissioner Danny Wuerffel said. statement. “We are taking other steps to assist taxpayers who have missed their due payments, and we also have options available to assist those who are struggling to make their payments.”
The mailed IRS notices, which should start arriving in your mailbox this month, will outline the amount of penalty reduction you received.Taxpayers can also check IRS.gov To access your tax returns and records.
Complete coverage: 2024 Taxes — Everything You Need to File Your Taxes on Time
What you need to know about unpaid forgiveness clauses
Rob Seltzer, a certified public accountant (CPA) with Seltzer Business Management, said penalty relief is automatic for taxpayers who don't pay their taxes, but only for taxes of $100,000 or less. limited, said Rob Seltzer, a certified public accountant (CPA) with Seltzer Business Management.
“If a taxpayer had already paid a penalty before the relief was announced, it will be automatically refunded,” he added.
If a taxpayer is not eligible for this relief, the IRS recommends that you apply for relief based on: Initial Abate Program.
Another thing that affected taxpayers need to consider is the interest that the IRS did not waive.
CPA Janet Lee Klockman told Yahoo Finance, “While the fine may be higher, the unpaid balance will continue to accrue interest until it is paid in full.” he said.
Taxpayers should consult a tax professional if they have questions about penalty relief or interest.
Taxpayers should also be wary of scammers impersonating the IRS.
“The IRS will be sending a letter rather than an email or text message, and the IRS will not require payment by gift card,” Lawrence Pon, a certified public accountant at Pon & Associates, told Yahoo Finance. “All payments to the IRS are made of checks You can pay to the address on the letter or electronically to the IRS. Using a bank account or credit or debit card. ”
Rhonda is Yahoo Finance's senior personal finance reporter and an attorney with experience in law, insurance, education, and government. Follow her on X @writesronda
Read the latest personal finance trends and news from Yahoo Finance.
