COVID Tax Relief: IRS Tax Penalty Forgiveness – Only Before 9/30/22!

Have you filed your IRS Taxes? If not, you have racked up your failure to file penalty – but there is outstanding news for you! If you file your IRS 2019 and 2020 taxes before September 30^th, all penalties will be forgiven automatically![1] If you already paid those penalties and filed your taxes before September 30^th, you too will get COVID relief with a refund![2]

Certain failure to file penalties that will be refunded or forgiven include Form 1040 US individual income tax return, form 1040-SR US tax return for seniors, and Form 1040-SS US Self-Employment Tax Return. They will also forgive and refund failure to file penalties for Form 1120 US Corporation income tax return, 1120-C US Income tax return for cooperative associations, Form 990-T Exempt Organization Business Income Tax Return, and more. For a full list, look at pages 5-7 of the IRS Notice 2022-36.[3]

All of these forms MUST be filed on or before September 30^th, 2022, to receive the penalty forgiveness or refund.

S-Corporations will also experience relief for penalties for failure to timely file any information return for 2019 returns that were filed on or before:[4]

• 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)
• March 15, 2020
• 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)
• March 31, 2021 (if filed electronically)
• March 15, 2021.

Exceptions to this penalty relief do not apply to any penalties that are not specifically listed in the grant of relief under section 3.A of Notice 2022-36, pages 5-7. This also includes if a fraudulent return was filed, if the penalties were part of an accepted offer in compromise or a closing agreement, or if the penalties were finally determined by a court.[5]

Q: I already paid my penalties. When will I get a refund?

A: You should receive your refund by the end of September.

Q: Where do I apply to get penalty relief?

A: No need to apply! As long as you have filed before or on September 30^th and are eligible, you will receive relief.

If you need help with overdue tax returns or need help with other tax-related issues, use this link to see if you are eligible for a free consultation.

[1] IR-2022-155. (2022, August 24). Covid tax relief: IRS provides broad-based penalty relief for certain 2019 and 2020 returns due to the pandemic; $1.2 billion in penalties being refunded to 1.6 million taxpayers. Internal Revenue Service. Retrieved August 26, 2022, from https://www.irs.gov/newsroom/covid-tax-relief-irs-provides-broad-based-penalty-relief-for-certain-2019-and-2020-returns-due-to-the-pandemic-1-point-2-billion-in-penalties-being-refunded-to-1-point-6-million-taxpayers

[2] (IR-2022-155, 2022a)

[3] Huang, H. (2022, August 24). PDF. Washington DC; Office of the Associate Chief Counsel (Procedure and Administration). Penalty Relief for Certain Taxpayers Filing Returns for Taxable Years 2019 and 2020

[4] (Huang, H., 2022a)

[5] (IR-2022-155, 2022b)