The IRS said on Wednesday that it will not charge late-filing fines to about 1.8 million taxpayers who turned in their 2020 tax returns after the May 17 deadline. The agency said qualified taxpayers will automatically get back or be credited more than $1.8 billion in fines.
IRS Grants Reprieve: Waives Late-Filing Penalties for 1.8 Million Taxpayers, Refunding Over $1.8 Billion in Penalties (Photo: Google)
Who qualifies for penalty relief?
Individuals who paid at least 90% of their taxes and filed a 2020 tax return by August 2, 2021, will not have to pay a penalty. The IRS said it will find these taxpayers and instantly waive the fines, so they don’t have to call or send in any forms.
The IRS also said it would waive some penalties for other people who had trouble filing or paying their taxes because of the COVID-19 pandemic. These people include taxpayers who asked for more time to file, taxpayers who made a payment plan with the IRS, and taxpayers who are eligible for the program that waives the first-time penalty.
In addition, the IRS advised people who are unable to pay their taxes in full to look at its website for payment options like installment agreements, offers in compromise, and online payment agreements. The agency also told taxpayers that if they have a good reason for filing or paying late, they can ask for a penalty to be waived.
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Why is the IRS offering the penalty relief?
Lower fines are part of the IRS’s plan to help taxpayers deal with the unique problems caused by the pandemic, the agency said. The agency said that the May 17, 2021, deadline for filing 2020 taxes was moved from April 15, 2021, to give people more time to get them ready and send them in.
The IRS is also working on a lot of tax payments and forms. The third round of stimulus money and advance payments for the child tax credit are among these payments. That month, on August 20, 2021, the IRS worked on more than 136 million tax forms and gave more than 96 million refunds for 2020.
If people file their taxes online and use direct payment, the IRS said they would get their refunds faster and safer. The IRS also advised people to check the status of their payments and returns on its website or the IRS2Go mobile app.
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