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IRS Forgives $1B in Penalties for 2020-2021 Back Taxes Owed

Economic Impact Payment Update: How Much Money Will I Receive from the IRS By the End of November? (Photo: PaymentsJournal)

IRS forgives fees for those who owe less than $100K in 2020-2021.

IRS to waive $1 billion in penalties for people and firms owing back taxes for 2020 or 2021. (PHOTO: nsj online)

According to NSJ Online, the IRS has just delivered welcome news, revealing plans to waive penalty fees for individuals and businesses with an annual back tax amount of less than $100,000 for both 2020 and 2021. This relief is anticipated to benefit nearly 5 million eligible taxpayers, encompassing businesses and tax-exempt organizations that earn less than $400,000 each year. The total relief package is substantial, reaching a figure of $1 billion. This decision was prompted by the unique circumstances of the COVID-19 pandemic, during which the IRS temporarily halted automated reminders for overdue tax payments.

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The IRS Commissioner, Daniel Werfel, shed light on the rationale behind this move during a press briefing. He explained that the decision to forgive failure-to-pay penalties stems from the suspension of automated reminders for unpaid taxes amid the pandemic. The IRS acknowledges the exceptional challenges faced by individuals and businesses, and this relief is seen as a one-time measure to address the extraordinary circumstances. Werfel assured eligible taxpayers that the process would be automatic for many, requiring no additional steps. Furthermore, for those who had already paid the failure-to-pay penalty, the IRS assures them of receiving a refund, emphasizing their commitment to supporting taxpayers through challenging times.

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