Eligible taxpayers who already paid their full balance will benefit from the relief, too.”Įligible taxpayers don’t need to take any action to get this relief – it is automatic. “Eligible taxpayers don’t need to take any action to get this relief – it is automatic. Nearly 70% of individual taxpayers receiving this penalty relief have income under $100,000 a year. Trusts, estates, and tax-exempt organizations can expect adjustments in late February to early March 2024. In late December 2023 to early January 2024, the IRS will first begin adjusting eligible individual accounts and then follow with adjustments to business accounts. What action is needed for eligible taxpayers to benefit from IRS adjustments? The IRS estimates 5 million tax returns are eligible for the penalty relief, representing $1 billion in savings to taxpayers, or about $206 per tax return. Moreover, the IRS is also taking steps to waive the failure-to-pay penalties for eligible taxpayers affected by this situation for tax years 20. If you owe and are unable to pay your full balance the IRS urges you to visit IRS.gov/payments to make arrangements to resolve your bill. The letter will alert the taxpayer of their liability, easy ways to pay, and the amount of penalty relief, if applied. Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.Īs the IRS takes steps to resume normal collection notices for tax years 20, the IRS will be issuing a special reminder letter, starting in January 2024. These reminders would have normally been issued as a follow-up after the initial notice. This relief comes after the IRS had temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. IRS Offers Penalty Relief and Special Reminder Letter for Overdue Tax Bills Taxpayers who are not eligible for this automatic relief also have options and may use existing penalty relief procedures.The failure-to-pay penalty will resume on April 1, 2024, for taxpayers eligible for relief.Taxpayers must have filed certain income tax returns for tax years 2020 or 2021 and must have been in the IRS collection notice process or issued an initial balance due notice between Feb.To qualify for this relief, the taxpayers assessed tax must be under $100,000.Taxpayers who may be eligible include individuals, businesses, trusts, estates, and tax-exempt organizations.This relief will provide about $1 billion in penalty relief, and most of those receiving the penalty relief make under $400,000 a year. This will impact approximately 4.7 million individuals, businesses, and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. Look who’s getting into the holiday spirit! The IRS announced a new penalty relief to help those who owe back taxes.
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