The Internal Revenue Service is granting penalty relief to many people and businesses who late-filed 2019 or 2020 tax returns during the COVID-19 pandemic. Check your bank account because the refunds are expected to arrive by end of September.
More than 1.6 million filers will automatically get penalty refunds or credits totaling more than $1.2 billion. Many people and organizations who submitted their tax returns late for 2019 and 2020 are eligible for the assistance, as stated by the IRS.
This action is intended to enable the IRS to concentrate its resources on processing backlogged tax returns and taxpayer correspondence to help restore to normal operations for the 2023 filing season, as well as to provide relief to both individuals and companies affected by the pandemic.
When a federal income tax return is filed late, the penalty is normally calculated at a rate of 5% of your unpaid balance per month and can reach a maximum of 25%. According to an IRS notice
, eligible tax returns include individual, corporation, estate, and trust returns among others. Any qualifying income tax return must be filed on or before September 30, 2022
, to qualify for this relief.
If you believe you were impacted by late filing fees, we urge you to evaluate the guidelines as this is a significant step to help taxpayers. If you have questions or are unsure whether you qualify for this relief, give us a call. We’d be happy to go over everything with you and answer any lingering questions.