Automatic Penalty Relief

On December 19, the IRS announced a new program to help taxpayers who have been hit with penalties for 2020 and 2021, but were unaware of the accumulating penalties due to a pandemic-era policy to halt sending penalty notices. IRS had temporarily stopped sending automated reminders to pay past due tax bills in February 2022. Penalties, however, continued to accrue, sometimes without the knowledge of the taxpayer. The IRS will resume its normal process of sending automated reminders this month. However, to ease the transition, it will automatically forgive penalties for certain taxpayers affected by this situation. Eligible taxpayers include individuals, businesses, trusts, estates, and not-for-profit entities with less than $100,000 of taxes for the tax years 2020 and 2021. The IRS will automatically grant the relief and refund the penalty if it has already been paid, or credit it to another outstanding liability. Check your tax transcript at irs.gov to determine if you received penalty relief, and if a refund is pending. You may contact the IRS after March 31 with questions about this program.