IRS Offers Penalty Relief for 2019, 2020 Tax Years
There is broad relief available for late tax payers
While the recently announced student loan debt relief has captured numerous headlines, it’s estimated that another federal relief program announced on the same day will provide more than $1.2 billion in tax refunds or credits. Specifically, IRS Notice 2022-36 extends penalty relief to both individuals and businesses who missed the filing deadlines for certain 2019 and/or 2020 tax and information returns. The relief covers many of the most commonly filed forms.
Broad relief for late taxpayers
The intent behind the penalty relief is two-fold: 1) to help taxpayers negatively affected by the Covid-19 pandemic, and 2) to allow the IRS to focus on processing backlogged tax returns and taxpayer correspondence. As recently as late May 2022, the IRS had a backlog of more than 21 million unprocessed paper returns. The goal is for the IRS to return to normal operations for the 2023 filing season.
To that end, the notice provides relief from the failure-to-file penalty. The penalty is typically assessed at a rate of 5 percent per month and up to 25 percent of the unpaid tax when a federal income tax return is filed late. To qualify for the relief, an income tax return must be filed on or before Sept. 30, 2022.
Please select this link to read the complete article from OSAP Strategic Partner Clark Schaefer Hackett (CSH).