The IRS has introduced penalty relief measures for approximately 4.7 million individuals, businesses, and tax-exempt organizations who missed automated collection reminder notices during the pandemic. This relief, totaling about $1 billion, mainly benefits those with incomes under $400,000.
IRS Penalty Relief for 5 Million Tax Returns:
Due to the pandemic, automated reminder notices for overdue tax bills were suspended in February 2022. However, the failure-to-pay penalty continued for those who didn’t fully pay their bills after the initial notice.
To help affected taxpayers, the IRS will send a special reminder letter next month, detailing their liability, payment options, and potential penalty relief. Taxpayers unable to pay the full balance should visit IRS.gov/payments for bill resolution.
The IRS is also waiving failure-to-pay penalties for eligible taxpayers for tax years 2020 and 2021. About 5 million tax returns, totaling $1 billion in savings, qualify. Relief applies automatically to those with assessed tax amounts under $100,000 until April 1, 2024.
Taxpayers ineligible for automatic relief can explore other penalty relief options on IRS.gov/penaltyrelief, such as reasonable cause criteria or the First-Time Abate program.
The IRS will resume collection notices in 2024 for taxpayers with prior-year tax debts, except those with multi-year debt. Taxpayers receiving these notices should review them carefully and use IRS.gov resources for tax debt assistance.
Note that failure-to-file and failure-to-pay penalties, plus interest charges, may apply to those not filing or paying taxes on time, with varying penalties depending on circumstances.
For detailed information, dates, and eligibility criteria, consult IRS Notice 2024-7 and visit IRS.gov.
Do you still owe taxes? Mraz Tax Solutions can help.
If you are unable to pay your tax bill in full by the original deadline, the IRS offers payment plans or installment agreements that allow you to pay off your balance over time in more manageable increments.
Mraz Tax Solutions can help with Negotiating payment plans and settlements. As well as filling your individual or business tax return.
You can also do it yourself: request a payment plan online using the IRS’s Online Payment Agreement tool or by completing Form 9465, “Installment Agreement Request”, and mailing it to the IRS.
Remember that tax laws and filing requirements can change, so it’s essential to consult the latest guidelines from the relevant tax agency or seek assistance from a qualified tax professional to ensure you meet all the necessary requirements and deadlines.
Mraz Tax Solutions is your trusted federal, state and local tax advisor and preparer. With our comprehensive income tax preparation services, we cater to both personal and small business tax needs. Our experienced professionals handle your tax returns, ensuring accuracy and maximizing deductions to help you minimize your tax liability.
In addition to tax return preparation, we offer tax return reviews to ensure the correctness and completeness of your filing. We understand the importance of avoiding errors and discrepancies, and our experts are here to provide a thorough review of your tax returns, giving you peace of mind.
Still not sure if we can help you with your taxes? Feel free to ask.
Contact our tax experts now.