The Internal Revenue Service announced that taxpayers affected by COVID-19 will receive relief from penalties for late filing of 2019 and 2020 tax returns. The relief from late filing penalties is expected to apply to most individuals and businesses who filed late returns.
The IRS isn’t forgetting about those who have already been assessed a penalty and paid it either.
According to the IRS almost 1.6 million taxpayers will automatically receive more than $1.2 billion in refunds or credits. The IRS expects many of these payments will be completed by the end of September.
The relief applies to the failure to file penalty which is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a tax return is filed late. In order to qualify for this relief taxpayers must file their 2019 or 2020 returns on or before September 30, 2022.
The penalty relief is automatic and the taxpayer does not need not apply for it. The IRS’s penalty relief is not available in some situations, such as where a fraudulent return was filed, where the penalties are part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court.
If you are facing is a tax issue with the IRS or New York State the attorneys at Beige Law, PLLC are here to help. Contact our office and start putting your tax issues behind you.