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

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

Published on September 02, 2022

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 30th, all penalties will be forgiven automatically![1] If you already paid those penalties and filed your taxes before September 30th, 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 30th, 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 30th 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)

 

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