Really, The IRS Check Made Out To You Is Likely Already In The Mail

Believe it or not, the IRS is refunding late filing penalty fees to taxpayers who filed their tax returns late for filing years 2019, 2020 and 2021 and who have their taxes and late filing penalties paid. The pandemic threw a wrench into everyone’s lives and getting tax returns filed on time was difficult for just about everyone. I mean, even the IRS couldn’t get into the office to see who had filed and who hadn’t. And they are still so backlogged now that there are people due refunds for paying too much who still haven’t received them. So, it comes as not too much of a surprise that the IRS has pulled themselves together enough to realize they need to give back money that was paid for something that was unavoidable. Hooray for them.

Show Me The Money

According to the IRS, they started sending notices to taxpayers at the end of August and will continue to do so over the next three months. If you’ve paid the penalty and your account is fully paid, there’s nothing to do. You will be receiving a check in the mail.

If penalties have been assessed, they will be removed, and if a request for abatement was denied, it will now be automatically granted. If the abatement or removal of penalties generates a refund, it will first be applied to any outstanding liabilities and any remaining credit balance will be paid by check and mailed to taxpayers’ current address in the IRS’s system. There is no option for direct deposit or to receive a debit card.

Exactly Who Will Be Getting The Refund

Filers of tax year 2019 information returns (other than IIRs) filed on or before August 3, 2020, will have any portion of an information return penalty that is the result of late filing abated. Information reporting penalties assessed for reasons other than lateness, such as incorrect information or non-compliance with e-file requirements, will not be waived. For tax year 2020 information returns (other than IIRs), the same relief applies to returns filed on or before August 2, 2021. For tax year 2021, taxpayers have just a few more days to get their taxes filed to be eligible. Those tax returns must be filed on or before September 30, 2022.

First Time Abatement and reasonable cause not impacted. 

The IRS notes that, “This program is designed specifically to meet the exigent circumstances of the pandemic. The relief does not fall into the category of either the First Time Abatement (FTA) or reasonable cause relief. FTA is an administrative waiver that provides otherwise-compliant taxpayers relief from penalties if certain criteria are met.” https://www.taxpayeradvocate.irs.gov/news/nta-blog-the-irs-is-automatically-providing-late-filing-penalty-relief-for-both-2019-and-2020-tax-returns/

There’s Still Time To File 2021 Taxes And Avoid Late Filing Penalty Fees
If you have not yet filed your taxes for 2022, you still have a couple of days to get them filed and have penalties removed. If you need help getting your taxes filed before next Friday, give us a call and let’s see if we can help you avoid getting on the wrong side of the IRS.