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IRS Penalty Relief

IRS Penalty Relief

IRS is Granting Penalty Relief for Tax Years 2019 and 2020 On August 23, 2022 the IRS released Notice 2022-36 granting penalty relief with respect to certain tax filings for the 2020 and 2021 tax years. The COVID-19 pandemic has had an unprecedented effect on the IRS’s personnel and operations. The IRS was tasked with distributing stimulus […]

IRS is Granting Penalty Relief for Tax Years 2019 and 2020

On August 23, 2022 the IRS released Notice 2022-36 granting penalty relief with respect to certain tax filings for the 2020 and 2021 tax years.

The COVID-19 pandemic has had an unprecedented effect on the IRS’s personnel and operations. The IRS was tasked with distributing stimulus payments, and other support and emergency services while sustaining its regular operations. This situation caused the IRS to experience a backlog in its operations, and this penalty relief will allow the IRS to focus its resources more effectively on other areas, as well as to give taxpayers an added measure of relief.

This relief is automatic, and does not entail any actions on behalf of, or by any taxpayers. To the extent that certain income tax or informational tax return for tax years 2019 or 2020 have NOT been filed, this relief is also being granted as long as those outstanding tax returns are filed on or before September 30, 2022. Any penalty relief under these procedures will be credited or refunded as appropriate; however, the IRS has not yet announced if or when it will notify eligible taxpayers that it has waived their preexisting penalties pursuant to this announcement.

This abatement includes the late filing of most business and individual tax returns, and below is a more comprehensive list of the exact forms and entities included in this waiver. Note that penalties arising from fraudulent activities and omissions are not included in the relief: