As tax time approaches, the IRS (Internal Revenue Service) has announced a new break for taxpayers who faced a tax penalty during the pandemic. This break is designed to help those who had difficulty meeting the tax filing or payment requirements due to the financial hardships of the pandemic.
Under the new program, the IRS is waiving any late filing or payment penalty which was assessed since March 13, 2020, including any interest accrued during that time. This relief applies to taxpayers who haven’t otherwise been granted relief from the IRS.
Taxpayers who faced a penalty for failing to file a tax return, make an estimated payment, pay a tax bill, or deposit taxes with the IRS can qualify for this relief. To claim the penalty waiver, taxpayers need to file an application for relief with the IRS. The application must include information and documentation demonstrating that the taxpayer was either directly or indirectly affected by the coronavirus pandemic.
If this waiver is granted, the taxpayer should still file the tax return and make any payment due by the due date to avoid any further penalties and interest. They will then be able to claim the waiver by subtracting the amount from their total bill.
If you think you may qualify for a penalty waiver, it’s important to act quickly as this waiver expires on June 28, 2021. If you are having difficulty understanding how the tax penalty works or finding the forms or documents you need to file the application, you can find help by visiting your local IRS office or seeking tax advice from an accountant or tax expert.