This week the IRS announced that it was abating certain penalties relating to the 2019 and 2020 tax periods.
Taxpayers who have already paid these penalties could be seeing a refund check in the mail.
What Penalties Will be Abated?
The following penalties for tax periods 2019 and 2020 if filed before September 30, 2022 will be abated:
- Section 6651(a)(1) failure to file penalties for most Form 1040 and 1120 series, Form 1041, Form 1066, Form 990-PF, and Form 990-T
- Systemic penalties for certain late-filed Form 5471, Form 5472, Form 3520, Form 3520-A
- Certain penalties for failure to file timely and show required information on Form 1065 and Form 1120-S
TIP: If you have not yet filed the above forms for the covered periods, you may qualify for penalty relief by filing before September 30, 2022.
In addition, certain failures to timely file information returns that meet the following criteria will be abated:
- 2019 returns that were filed on or before August 1, 2020, with an original due date of January 31, 2020; February 28, 2020 (if filed on paper) or March 31, 2020 (if filed electronically); or March 15, 2020; or
- 2020 returns that were filed on or before August 1, 2021, with an original due date of January 31, 2021; February 28, 2021 (if filed on paper) or March 31, 2021 (if filed electronically); or March 15, 2021.
Exception: No penalties will be abated under the announced relief if not specifically listed in section 3.A of Notice 2022-36. The penalty relief also does not apply to any return that has a fraudulent failure to file or fraud penalty, or to penalties included in an offer in compromise, IRS closing agreement, or judicial order,
How Do I get Penalty Relief?
If the penalty qualifies for abatement, it will automatically abated, refunded, or credited. There is no need to request relief.
If the penalty is abated, refunded, or credited you should receive a notice in the mail.