IRS Announces Pandemic-Related Penalty Relief
The IRS is offering new penalty relief for approximately 4.7 million individuals, businesses, and tax-exempt organizations that were not sent automated collection reminder notices during the COVID pandemic.
Due to the unprecedented effects of the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. These reminders would have normally been issued as a follow-up after the initial notice. 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.
The penalty relief only applies to eligible taxpayers with assessed tax under $100,000. Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations, and estates that filed certain Form 1040, 1120, 1041, and 990-T series income tax returns for tax years 2020 or 2021, with an assessed tax of less than $100,000, and that were in the IRS collection notice process — or were issued an initial balance due notice between Feb. 5, 2022, and before Dec. 7, 2023.
For purposes of the relief granted in this announcement, the “relief period” is the period that begins on the date the IRS issued an initial balance due notice to the eligible taxpayer, or February 5, 2022, whichever is later, and ends on March 31, 2024. Taxpayers with questions about eligibility should contact their ShindelRock tax professional.