Eligible taxpayers will still be liable for any failure to pay Eligible Tax Returns penalty that accrued before or after the relief period. 5, 2022, whichever is later, and ends on March 31, 2024. The “relief period” is the period that begins on the date the IRS issued an initial balance due notice to an eligible taxpayer, or Feb. Is otherwise liable during the “relief period” for accruals or additions to tax for the failure to pay penalty under section 6651(a)(2) or 6651(a)(3) with respect to an eligible return for taxable year 2020 or 2021.Was issued an initial balance due notice on or before Dec.7, 2023, excluding any applicable additions to tax, penalties or interest Has assessed income tax of less than $100,000 (on a per-return, per-entity basis) for the 2020 or 2021 tax year as of Dec.Eligibility for Automatic Penalty Relief Eligible TaxpayersĪ taxpayer is eligible for automatic relief if the taxpayer: ![]() If the automatic relief results in a refund or credit rather than abatement of outstanding penalties, taxpayers will be able to determine whether they received automatic relief by checking their tax transcript. The IRS will issue a special reminder letter starting next month that will alert taxpayers of outstanding liability, easy ways to pay and the amount of penalty relief they received, if applied. ![]() The IRS will resume issuing automated reminder notices beginning in 2024 for balances due for taxable years 2021 and earlier. The planned penalty relief is being provided to assist those who were not sent automated collection notices since February 2022, during which time the failure to pay penalties were continuing to accrue. In February 2022, the IRS imposed a moratorium on mailing certain automated collection notices-except initial balance due notices-while it worked through a backlog of original and amended returns. Notice 2024-7 provides details about the relief including eligible taxpayers, eligible returns, the relief period and exceptions. Taxpayers do not need to take any action to obtain the relief it will automatically apply to eligible taxpayer accounts. Relief will be granted to eligible trusts, estates, and exempt organizations in late February through March 2024. The relief has already been provided to eligible individual taxpayer accounts and will be provided to business accounts beginning in late December 2023. The plan will provide automatic relief of about $1 billion in penalty assessments to approximately 4.7 million individuals, businesses and tax-exempt organizations that may not have received automated collection reminders during the COVID-19 pandemic. ![]() The IRS announced a plan to relieve certain eligible taxpayers of failure to pay penalties incurred with respect to the taxpayers’ 20 income tax returns. Millions of taxpayers will receive penalty relief for failure to pay penalties ![]() The IRS is taking this step in tandem with the resumption of mailing automated notices of amounts due which had been temporarily suspended during the COVID-19 pandemic. Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations that meet certain qualifying criteria. The IRS announced plans to provide automatic penalty relief for failure to pay penalties incurred in tax years 20 on income tax obligations.
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