IRS Delivers $1 Billion Penalty Gift, Check Your Eligibility Now!

For the tax years 2020 and 2021, the IRS is waiving penalty penalties for taxpayers who failed to pay back taxes totaling less than $100,000 annually. The IRS said on Tuesday that the relief plan will waive $1 billion in fees for tax returns submitted for those years.

The tax authority announced that it is eliminating the fees as a result of the pandemic's interruption, which prompted the IRS to experience operational chaos and resulted in a significant backlog of unprocessed tax returns.

The remedy is intended to address a dilemma that arose from the tax agency's choice to halt notifications of outstanding balances owing by taxpayers. Penalties for taxpayers in arrears continued to accumulate even though the IRS never mailed the letters.

Officials stated that the statement is intended to be a one-time relief due to the extraordinary disruption brought on by the epidemic, even though the IRS intends to begin sending out regular collection reminders.

As regular collection procedures restart, the government will begin sending taxpayers a specific reminder letter starting next month to warn them of their responsibility.

If you are unable to pay the entire amount owed, the IRS encourages you to visit IRS.gov/payments to learn about your choices for a payment plan.

If a taxpayer files a Form 1040, 1041, 1120 series, or Form 990-T tax return for 2020 or 2021, owes less than $100,000 in back taxes annually, and receives an initial balance-due notice between February 5, 2022, and December 7, 2023, they are eligible for automatic penalty reduction.

In a conversation with reporters, Werfel stated that individuals who paid the failure-to-pay penalty will receive a refund. "People need to know the IRS is on their side," he stated.

According to the IRS, the majority of the approximately 5 million individuals, companies, and tax-exempt organizations that will get the assistance earn less than $400,000.

Updated Processing Times for IRS Tax Returns and Refunds

All paper and electronic individual returns submitted by November 2023, according to the government, have been processed. Furthermore, according to the organization, mail is being opened during regular business hours. They claim that if there were no problems on the forms or they didn't need more examination, then all individual returns received for tax years 2021 or prior have been completed.

According to the data, the government has 705,000 unprocessed individual returns (Forms 1040) as of December 2, 2023. These include late-filed returns from previous years and tax years 2022 and 2021 that require examination or modification.

Of the unprocessed individual returns, 105,000 are paper returns that are awaiting review and processing, and 700,000 require mistake repair or other special handling. The IRS will sometimes take longer than 21 days to process returns because they need particular attention from an IRS employee.

The IRS will process individual tax returns for which refunds are due first that were received in the current year. The IRS naturally wants to be paid, thus tax returns that show taxes owed are handled last. If a payment is sent with the tax return by mail, it is deposited separately as soon as it is received.

Most of the time, nothing more has to be done. If the IRS requires further information or if we make changes to your return, it will get in touch with you by mail. Other than quickly answering any requests for information, if you submitted online and received an acknowledgement, you don't need to take any additional action.