IRS ANNOUNCES NEW COVID PENALTY RELIEF for 2020-2021 Tax Years
The Internal Revenue Service recently announced a program to give taxpayers Penalty Abatement relief for those who owe taxes for the years: 2020 and 2021. Taxpayers will have until April 1st, 2024, to pay these taxes.
The reason for this is due to the pandemic when the IRS stopped sending out collection notices. Many taxpayers did not realize their taxes would accrue penalties and interest during this period. As a fair response to a difficult moment in history, the IRS is providing this opportunity as an incentive to taxpayers who owe for these periods. Those who do will find unprecedented penalty relief.
To qualify, taxpayers must file taxes under $100k for 2020-2021 and must have received an initial notice before December 7th, 2023.
Taxpayers that have already paid these taxes and penalties should expect a refund for the penalties, or a notice in early January.
Other Penalty Relief
If you do not fit within these parameters but still have substantial penalties on your account, you may still apply for Penalty Relief. If you are able to demonstrate Reasonable Cause, the IRS may remove the penalties. This can be done through IRS Form 843.
If you have any questions about this new Covid Penalty Relief for 2021, penalties or general tax questions involving the IRS, New York State, New Jersey or other states, please do not hesitate to contact our office at: 1-888-382-7880 or email us at daniel@dmsilverlaw.com.
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Citations/Source
Ebeling, A. (2023). IRS Zaps Nearly $1 Billion in Penalties for Taxpayers [Review of IRS Zaps Nearly $1 Billion in Penalties for Taxpayers]. Wall Street Journal. https://www.wsj.com/personal-finance/taxes/irs-waives-nearly-1-billion-in-penalties-for-taxpayers-3f717627
