Thursday, September 21, 2023
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IRS to clear $1.2 billion in late fees from pandemic

(Bloomberg) — The Internal Revenue Service announced Wednesday that it will eliminate late fees for taxpayers struggling to file their tax returns on time during the pandemic.

The IRS estimates that nearly 1.6 million taxpayers will receive penalty relief worth more than $1.2 billion. Tax authorities will automatically issue refunds or credits for most fees by the end of September.

“Throughout this pandemic, the IRS has been working hard to support the state and provide relief to people in a number of different ways,” IRS Commissioner Chuck Rettig said in a Wednesday statement. said in a statement. “The penalty relief released today is another way for the agency to support people during these unprecedented times. For eligible individuals or businesses, this penalty will be automatic; there is no need to call.”

2019 and 2020 tax returns due to IRS filings in 2020 and 2022 will be eligible for relief. Taxpayers must file any late returns by September , 2022 to be exempt from late fees.

Penalties for failure to file a tax return may amount up to 25% of the unpaid tax. The agency said the IRS will not condone penalties for failing to pay or file fraudulent tax returns. obey. The agency has extended tax filing deadlines 2020 and 2021 to give taxpayers more time to file their tax returns and pay what they owe.

The IRS has been criticized for not doing enough to help taxpayers meet their filing obligations. Long wait times and not enough customer service representatives made it difficult for the IRS to answer any questions.

The IRS has also been criticized for its massive backlog of paper returns, meaning millions of taxpayers have filed and paid taxes that the agency cannot process for weeks or months . Earlier this year, the IRS also suspended notices and automated collections to individuals amid pressure from Congress to stop the mailings until the backlog was reduced. The pandemic will help them clear the backlog of returns that still need to be processed.

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