TAXES
IRS offers help paying fines: who is eligible and how to apply
The IRS offers help to millions of taxpayers to pay penalties for tax returns for the 2020 and 2021 tax years.
During the tax season, taxpayers are required to file their returns and pay the corresponding taxes by mid-April. If they fail to do so, they may face additional penalties and interest. The Internal Revenue Service (IRS) has recently announced new penalty relief for around 4.7 million individuals, businesses, and organizations, which is good news for many taxpayers.
Who is eligible for IRS penalty relief?
Taxpayers who did not receive automated collection reminder notices during the pandemic can avail relief, as per the tax agency. Although reminder notices were suspended during the Covid-19 outbreak, the non-payment penalty still accrues for taxpayers who failed to pay their bills in full after receiving the initial reminder notice.
To support such taxpayers, the IRS will send a special notice beginning next month. This letter will notify them of their responsibility, provide simple payment options, and inform them of the amount they owe, if applicable. The IRS advises taxpayers who cannot pay the complete balance to visit their website to explore other payment options.
Additionally, the agency is taking steps to eliminate nonpayment penalties for eligible taxpayers affected by this situation for tax years 2020 and 2021. This represents $1 billion in savings or about $206 per return.
How to claim relief?
The IRS has announced that eligible taxpayers will automatically receive a penalty exemption. They do not need to take any action to obtain it. If taxpayers have already paid their non-payment penalties for the 2020 and 2021 tax years, the IRS will issue a refund or credit the payment if there is another outstanding tax obligation.
It is important to note that penalty relief only applies to eligible taxpayers with taxes assessed below $100,000. Taxpayers who are eligible for relief need to know that the non-payment penalty will resume on April 1, 2024.
How do I know if I owe a fine?
If the IRS imposes a penalty on you, they will send a notice or letter to your address. This document will provide details about the penalty, the reason for it, and what actions you should take next. Each notice or letter has a unique identification number. If you require more information, you can visit the fines section of the IRS website.