Americans who filed tax reports later due to the pandemic and paid penalties will be refunded by the IRS
The Internal Revenue Service indicated that it will assist struggling taxpayers impacted by the epidemic by issuing some late-filed tax refunds.
Wednesday, the IRS released a notice providing penalty relief to the majority of individuals and corporations who submitted certain 2019 or 2020 reports late.
When a federal income tax return is submitted after Tax Day, the failure-to-file penalty is normally charged at a rate of 5% each month and up to 25% of the unpaid tax.
“The penalty relief issued is yet another way the agency is supporting people during this unprecedented time. This penalty relief will be automatic for people or businesses who qualify,” said IRS Commissioner Chuck Rettig.
According to the Internal Revenue Service, the notification involves $1.2 billion in fines for nearly 1.6 million people.
Individual tax returns for 2019 or 2020 must be filed by September 30 to be eligible for late-filing penalty forgiveness, according to the Internal Revenue Service. Taxpayers who have previously paid a penalty will get a refund automatically.
The majority of qualified taxpayers will receive their refunds by September’s end.
In addition, the IRS notice waives some penalties for organizations and individuals who were obliged to file foreign information reports late.
According to the agency, these modifications will aid in reducing the backlog of unprocessed tax returns in preparation for a return to normal operations for the 2023 filing season.
