Good News for Taxpayers: IRS to Waive Failure-to-File Penalties for Certain Taxpayers in Response to Pandemic
In response to the COVID-19 pandemic, the IRS issued Notice 2022-36, waiving failure-to-file penalties against certain taxpayers for 2019 and 2020. However, taxpayers must act fast to take advantage of this tax debt relief. To qualify, the missing returns must be filed on or before September 30, 2022.
As directed by the President under the Robert T. Stafford Disaster Relief & Emergency Assistance Act in March 2020, the IRS offered taxpayers a series of tax relief provisions in response to the pandemic over the past two years.
Notice 2022.36 provides that the IRS will not impose certain failure to file penalties typically imposed under IRC Sec. 6651(a)(1) for qualifying taxpayers regarding the following types of personal income tax returns so long as taxpayers file the missing returns on or before the relief deadline expires on September 30, 2022.
- Form 1040, U.S. Individual Income Tax Return;
- Form 1040-C, U.S. Departing Alien Income Tax Return;
- Form 1040-NR, U.S. Nonresident Alien Income Tax Return;
- Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents;
- Form 1040 (PR), Federal Self-Employment Contribution Statement for Residents of Puerto Rico;
- Form 1040-SR, U.S. Tax Return for Seniors; and
- Form 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico).
The relief also applies to taxpayers filing certain 1041, 1120, and 990 tax returns.
Notably, late-payment penalties concerning the missing returns have not been waived. The IRS anticipates that qualifying taxpayers can expect credits and refunds to be issued over the next three months. However, before issuing any payment to taxpayers, the IRS will offset penalty refunds against any other outstanding tax liabilities.
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