The IRS said Tuesday it is going to waive penalty fees for those who failed to pay back taxes that total less than $100,000 per year for tax years 2020 and 2021, the Associated Press reports. Nearly 5 million people, businesses, and tax-exempt organizations — most making under $400,000 per year — will be eligible for the relief starting this week, which totals about $1 billion, the agency said.
The IRS temporarily suspended mailing automated reminders to pay overdue tax bills during the pandemic, beginning in February 2022, and agency leadership says the pause in automated reminders is a reason behind the decision to forgive the failure-to-pay penalties.
While the IRS plans to resume sending out normal collection notices, the Tuesday announcement is meant as one-time relief based on the unprecedented interruption caused by the pandemic, IRS officials said.
Taxpayers are eligible for automatic relief if they filed a Form 1040, 1041, 1120 series, or Form 990-T tax return for years 2020 or 2021; owe less than $100,000 per year in back taxes; and received an initial balance-due notice between Feb. 5, 2022 and Dec. 7, 2023.
Those who paid the failure-to-pay penalty will get a refund.
