Penalties For 2020 And 2021 Taxes" width="100%" height="145px" />Kemberley Washington is a tax journalist and provides consumer-friendly tax tips for individuals and businesses. Her work goes beyond tax articles. She has been instrumental in tax product reviews and online tax calculators to help individuals make i.
Kemberley Washington Tax WriterKemberley Washington is a tax journalist and provides consumer-friendly tax tips for individuals and businesses. Her work goes beyond tax articles. She has been instrumental in tax product reviews and online tax calculators to help individuals make i.
Written By Kemberley Washington Tax WriterKemberley Washington is a tax journalist and provides consumer-friendly tax tips for individuals and businesses. Her work goes beyond tax articles. She has been instrumental in tax product reviews and online tax calculators to help individuals make i.
Kemberley Washington Tax WriterKemberley Washington is a tax journalist and provides consumer-friendly tax tips for individuals and businesses. Her work goes beyond tax articles. She has been instrumental in tax product reviews and online tax calculators to help individuals make i.
Tax Writer Caren Weiner Personal Finance EditorSince her first tax article appearing more than three decades ago in Money magazine, Caren Weiner has written and edited stories about money management topics ranging from investment fees and health costs to household budgets. Her finance- and invest.
Caren Weiner Personal Finance EditorSince her first tax article appearing more than three decades ago in Money magazine, Caren Weiner has written and edited stories about money management topics ranging from investment fees and health costs to household budgets. Her finance- and invest.
Caren Weiner Personal Finance EditorSince her first tax article appearing more than three decades ago in Money magazine, Caren Weiner has written and edited stories about money management topics ranging from investment fees and health costs to household budgets. Her finance- and invest.
Caren Weiner Personal Finance EditorSince her first tax article appearing more than three decades ago in Money magazine, Caren Weiner has written and edited stories about money management topics ranging from investment fees and health costs to household budgets. Her finance- and invest.
| Personal Finance Editor
Updated: Jan 22, 2024, 1:32pm
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Penalties For 2020 And 2021 Taxes" width="100%" height="145px" />
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If you received a penalty for failure to pay your 2020 or 2021 taxes, the IRS may be giving you a break.
The IRS recently announced it would provide penalty relief to 4.7 million taxpayers who didn’t receive proper collection reminder notices for the tax years 2020 and 2021. Taxpayers will still owe any unpaid tax balance, but roughly two years’ worth of failure-to-pay penalties will be forgiven.
The agency expects to grant about $1 billion in tax relief. It says that almost 70 percent of individual taxpayers who receive this relief have income of less than $100,000 per year.
“During the pandemic, the IRS temporarily suspended sending automated notices to pay overdue tax bills. The IRS is restarting to send those notices now during 2024,” explains Melanie Lauridsen, vice president of tax policy and advocacy for the American Institute of CPAs. “Given the unusual situation…the IRS is offering relief.”
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On intuit's WebsiteTaxpayers who may qualify for penalty relief:
Taxpayers have a limited time to pay off their balances in full before the penalty resumes. Carl R. Johnson, a certified public accountant in New Orleans, says the IRS is waiving only the penalties charged during a set period: from the date that the IRS sent its initial balance due notice to the taxpayer (or February 5, 2022, whichever is later) to March 31, 2024.
After March 31, 2024, taxpayers who qualify for relief will again be subject to the failure-to-pay penalty.
The IRS has said that taxpayers who qualify for penalty relief won’t have to take any additional action. If you’ve already paid your outstanding balance in full, you’ll get a tax refund for the failure-to-pay penalty amount linked to the 2020 or 2021 tax return. The refund will be sent to the address on record for those returns.
That’s why taxpayers who have relocated since filing their 2020 or 2021 return should take one additional step, says Lauridsen. “If you recently moved, you may complete ‘Form 8822, Change of Address’ or ‘Form 8822-B, Change of Address or Responsible Party — Business’ to let the IRS know,” she says.
If you have yet to pay the penalty, the IRS will adjust your account by issuing you a credit. You can check your IRS online account to see if you’ve received any credits from the agency.
The IRS will issue the first round of refunds now and until the end of January. If a taxpayer doesn’t receive a refund, the IRS will send a special notice with an updated balance near the same time.
Johnson encourages taxpayers to explore alternative payment options, such as an installment agreement or offer in compromise, to pay off any remaining balances and prevent adverse actions by the IRS.
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Tax WriterKemberley Washington is a tax journalist and provides consumer-friendly tax tips for individuals and businesses. Her work goes beyond tax articles. She has been instrumental in tax product reviews and online tax calculators to help individuals make informed tax decisions. Her work has been featured in Yahoo Finance, Bankrate.com, SmartAsset, Black Enterprise, New Orleans Agenda, and more. She frequently appears on NBC's WDSU news broadcast.
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