On August 24, 2022, the IRS announced that it will grant relief for failure-to-file (FTF) penalties on the following 2019 and 2020 federal tax returns:
In addition, filers of tax year 2019 information returns (other than IIRs) filed on or before August 3, 2020, will have any portion of an information return penalty that is the result of late filing abated. Information reporting penalties assessed for reasons other than lateness, such as incorrect information or non-compliance with e-file requirements, will not be waived. For tax year 2020 information returns (other than IIRs), the same relief applies to returns filed on or before August 2, 2021.
Act now to qualify for this penalty relief
If you are required to file an income tax return or IIR for 2019 or 2020 and haven’t already done so, act now! Taxpayers who file any of these returns on or before September 30, 2022, will not be subject to penalties for late filing. The penalties within the scope of the IRS’s relief will be automatically abated, refunded, or credited, as appropriate, without any need for taxpayers to request this relief. If you’ve already filed and received a bill for a FTF penalty on one or more of the tax returns listed above, it will be reversed, even if you already requested abatement and it was denied. If you’ve already paid the penalty, you are entitled to a refund, which will generally be issued as a paper check. However, if you owe other federal debts, the refund will be applied to those debts first and then any remainder issued as a refund to you.
Are there any exceptions?
This broad penalty relief does not apply to:
The Treasury Department and the IRS have determined that this penalty relief will allow the IRS to focus its resources more effectively, as well as provide additional relief to taxpayers affected by the COVID-19 pandemic.
We will update this article as more details are available.