The IRS announced a waiver of around $1 billion in penalties for taxpayers who failed to pay taxes on time during the pandemic, providing relief for nearly five million taxpayers.
The relief applies to individuals, tax-exempt organizations, and companies that owed less than $100,000 for tax years 2020 and 2021.
The agency will refund and credit penalties already paid and will resume sending reminders for overdue payments next month. (Trending: Bud Light Gets Bad News Ahead of Christmas)
“We know this is a tough situation, but the IRS is looking out for taxpayers,” IRS Commissioner Danny Werfel said.
“This is a big step.”
“We estimate 5 million tax returns representing about 4.7 million taxpayers are eligible for this special penalty relief.”
“The bottom line for today’s announcement is that the IRS continues to work hard to help taxpayers, and we are taking special steps to help people with these past due bills,” Werfel said.
The relief does not cover interest charges, and eligible taxpayers will receive a special reminder letter in January detailing their liability and waived penalties.
The penalty relief is automatic, benefiting “average, hardworking taxpayers” earning under $100,000 per year, with an average reduction in tax of $206 per eligible person for each tax year.
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