IRS Penalty Relief 2024 - Helping Taxpayers
The U.S. Internal Revenue Service (IRS) has some good news for people who may have made mistakes with their taxes in 2020 and 2021. They are offering a way to reduce the fines you might owe them.
Big Help
The IRS will forgive almost $1 billion in penalties. This means they won't make you pay nearly $1 billion in fines. This is for people who didn't get reminders to pay their taxes during the COVID-19 pandemic. But this offer only covers the years 2020 and 2021.
Who Can Get Help
To get this help, your owed taxes must be less than $100,000. You must have filed certain tax forms (like Form 1040) for 2020 or 2021, and your owed taxes must be less than $100,000. Most people getting this help make less than $400,000. Also, if you got a notice from the IRS between February 5, 2022, and December 7, 2023, saying you owe money, you can qualify. But remember, each person or company can only get up to $100,000 in relief. The fines will start again on April 1, 2024, if you don't qualify anymore.
How Much Help
The IRS is offering a big help to people who were late with their taxes. Normally, if you're late, they charge you a penalty of 5% of what you owe for each month you're late, up to 25% total. If you're really late, they might make you pay at least $435 or 100% of what you owe, whichever is less. If you didn't pay, they might charge you 0.5% of the overdue taxes, up to 25% total. If you're late in both filing and paying, they'll charge you a 5% penalty, which includes a 4.5% for filing late and 0.5% for not paying on time.
Easy Process
If you're eligible for this help, you'll get it automatically. You don't have to do anything extra. This is because the IRS couldn't send reminders on time due to the pandemic. They did send out initial notices for taxes owed in 2020 and 2021, but they didn't send reminders. Even if they didn't send reminders, the fines kept adding up, so this help is really important.
In January 2024, the IRS will send special letters to remind people about their taxes, payment options, and penalty relief. But if you qualify for help, the penalty will start again on April 1, 2024.
If you get a letter from the IRS, make sure to read it carefully and do what it says. If you're not sure what to do, you can ask a tax expert for help. If you can't pay all your taxes, the IRS suggests going to IRS.gov/payments to set up a payment plan.
Making Sure You Get Help
If you're supposed to get IRS Penalty Relief but haven't by the deadline, here's what to expect:
- The IRS will start giving refunds in January 2024.
- If you don't get a refund by early 2024, you might get another letter showing how much you still owe.
- After March 31, 2024, you can contact the IRS if you have questions about penalty relief.
Follow the instructions in the IRS letters you get. Sometimes, they might approve requests to lower penalties over the phone. So, don't be afraid to call the toll-free number in your letter.
In summary, IRS Penalty Relief 2024 is the IRS's way of helping people who owe them money because of tax mistakes in 2020 and 2021. It's automatic, and there are rules about who can get it. It's a good thing for many Americans trying to figure out their taxes.
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