Penalty relief coming for taxpayers and businesses
The IRS has announced broad-based penalty relief for certain 2019 and 2020 returns due to the COVID-19 pandemic. The penalty abatement will be automatic for people and businesses who qualify and if the penalty has already been paid, the taxpayer will receive a credit or refund.
The relief applies to the failure to file penalty, typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. This relief applies to returns in both the Form 1040 and Form 1120 series, as well as various information returns such as those in the Form 1099 series.
To qualify, any eligible income tax return must be filed on or before 9/30/22. Collection notices are still in the system and it’ll be some time before their system catches up. For assistance ensuring you qualify for this relief, please contact a ShindelRock tax professional.