Penalty Relief for 2020 and 2021 Returns
Starting in February 2022, IRS temporarily suspended mailing automated reminders to taxpayers to pay overdue tax bills. These reminders would have normally been issued as a follow-up after the initial notice. Although these reminders were suspended, the failure-to-pay penalty continued to accrue for those who did not fully pay their bills in response to the initial balance due notice.
IRS has now announced penalty relief for the almost five million individuals, businesses, and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic. IRS will issue a special reminder letter starting next month alerting the taxpayer of their liability, ways to pay, and the amount of penalty relief, if applicable.
In January, IRS will begin sending automated collection notices and letters to individuals with tax debts prior to tax year 2022, as well as to businesses, tax exempt organizations, trusts, and estates with tax debts prior to 2023. Learn more here