The IRS declared on Wednesday that it would absolve many Americans of penalties for filing their tax returns after the pandemic had already begun.
According to the federal agency, more than 1.6 million filers will automatically receive penalty refunds or credits totaling more than $1.2 billion, with many payments anticipated by the end of September.
According to IRS Commissioner Chuck Rettig, “the IRS has worked hard to support the nation and provide relief to people in many different ways throughout the pandemic.”
He stated that the penalty relief was “yet another way the agency is assisting people during this unprecedented time.”
The agency’s late filing penalty of 5% of your unpaid balance per month, with a maximum penalty of 25%, is also exempt from the waiver. 0.5% monthly late payment penalties are still possible.
According to an IRS notice, eligible tax returns include individual, corporate, estate, and trust returns among others. To qualify, you must submit the tax returns by September 30, according to the IRS.
According to the notice, the IRS has been “working aggressively” to process backlogged returns and taxpayer correspondence in order to resume “normal operations” in time for the 2023 filing season. Additionally, the agency said that the penalty relief will enable it to “focus its resources more effectively”.