Introduction:

Amidst the ongoing challenges brought about by the pandemic, the IRS has announced automatic penalty relief for taxpayers with a balance due in tax years 2020 and/or 2021. This initiative, effective from Feb. 5, 2022, to Dec. 7, 2023, specifically targets those who did not receive balance due reminders during the pandemic-related pause.

Key Points:

Automatic Penalty Waiver:

The IRS will automatically waive failure-to-pay penalties on assessed taxes less than $100,000 for tax years 2020 or 2021, offering relief to eligible individuals and entities.

Eligibility Criteria:

Taxpayers filing Form 1040, 1041, 1120 series, or Form 990-T for 2020 and/or 2021, with assessed taxes below $100,000 and receiving initial balance due notices (CP14 or CP161) between Feb. 5, 2022, and Dec. 7, 2023, qualify for automatic relief.

No Additional Actions Needed:

Eligible taxpayers need not take extra steps. If payments were made or the balance is settled, they qualify. Overpayments automatically apply to other tax years, and settled accounts result in refunds.

Address Update Requirement:

Taxpayers must update their address for IRS communications and refunds.

Exclusion for Higher Tax Liabilities:

Those with assessed taxes exceeding $100,000 aren’t eligible for automatic relief. They can explore relief options under reasonable cause or the First-Time Abate program. Give me a call at 703-847-0757 if you need help exploring these options.

Conclusion:

The IRS’s automatic penalty relief for 2020-2021 offers timely assistance without cumbersome procedures. Eligible taxpayers are encouraged to stay informed, update their information, and utilize the relief provided. For detailed information, visit IRS.gov/penalty relief or contact the IRS after March 31, 2024, with any inquiries. This initiative underscores the IRS’s commitment to supporting taxpayers during these challenging times.