Back Taxes News

aamirrykjobsalert December 21, 2023

Back Taxes News

The IRS announced on Tuesday that it will not charge penalty fees to taxpayers who did not pay back taxes for the tax years 2020 and 2021 that totaled less than $100,000 annually.

Beginning this week, nearly 5 million individuals, companies, and tax-exempt organizations—the majority of whom earn less than $400,000 annually—will be qualified for the aid, which has a total estimated value of $1 billion, according to the agency.

Beginning in February 2022, the IRS temporarily stopped sending automated reminders to taxpayers to pay past-due taxes. According to agency leadership, this decision to forgive failure-to-pay penalties was made because of the suspension of automated reminders.

The IRS stated in a statement that "these reminders would have normally been issued as a follow-up after the initial notice due to the unprecedented effects of the COVID-19 pandemic."

"The failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice, even though these reminder notices were suspended.”

The announcement on Tuesday is intended to be a one-time relief due to the unprecedented disruption brought on by the pandemic, according to IRS officials, even though the IRS intends to resume sending out regular collection notices.

IRS Commissioner Daniel Werfel told reporters, "It was an extraordinary time and the IRS had to take extraordinary steps." According to him, many taxpayers will experience the change automatically and won't need to take any further action.

If a taxpayer files a Form 1040, 1041, 1120 series, or Form 990-T tax return for 2020 or 2021, owes less than $100,000 in back taxes annually, and receives an initial balance-due notice between February 5, 2022, and December 7, 2023, they are automatically eligible for relief.

In a conversation with reporters, Werfel stated that individuals who paid the failure-to-pay penalty would receive a refund. "People must understand that the IRS is working for them," he stated.