IRS Penalty Relief

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The first half of this article provides details on the resumption of overdue tax bill reminders. The second half provides information on getting IRS Penalty Relief.

Resumption of Past Due Notices

In response to COVID, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February of 2022. (But they didn’t suspend the mailing of the first balance due notices.) The IRS will begin mailing automated reminders again in February 2024. Who will receive theirs when?

  1. Everyone with a past due tax bill will receive a special reminder notice starting in January 2024. This “special” notice announces the resumption of automated reminder notices, and gives recipients the chance to resolve their tax bill before regular notices resume.
  2. Individuals with an overdue 2022 tax bill, and business taxpayers with overdue third-quarter 2023 tax bills, already began receiving notices in Fall 2023.
  3. Individuals and businesses with past due balances from 2021 and older will start getting reminders in February 2024.

The special reminder letter will include the balance due, and a QR code to quickly access your account, make a payment, and apply for a payment plan. The letter will also contain options to help if you can’t pay in full.

Before COVID, all IRS “series 500” notices were mailed every 5 weeks. Starting in January 2024, the time between mailings will be extended to 8 weeks.

IRS Penalty Relief

Along with the resumption of these past due notices, the IRS is providing additional penalty relief for taxpayers with outstanding 2020 and 2021 tax bills. The penalty relief is automatic, meaning no action is necessary from the taxpayer. If the relief results in a refund or credit, and the taxpayer has no other tax bills, then they will receive a refund. Here’s who is eligible:

  • Tax bill of less than $100,000 (limit applies separately to each return and entity)
  • Includes individuals, businesses, trusts, estates, and tax-exempt organizations
  • Filers of tax return Forms 1040, 1041, 1120, and 990T
  • Began receiving IRS collection notices between 2/5/22 and 12/7/23
  • NOTE: Failure to pay penalty will resume April 2024 for anyone meeting the above criteria if payment arrangements aren’t made before then

If you don’t meet the criteria above, you may still be eligible for penalty relief. Visit this page of the IRS website for more info.

From a live IRS Webinar on January 30th, 2024.

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Gwen Harrison President

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