{"id":16357,"date":"2022-10-14T15:50:07","date_gmt":"2022-10-14T20:50:07","guid":{"rendered":"https:\/\/www.sfwpartnersllc.com\/news-and-guides\/?p=16357"},"modified":"2022-10-14T10:50:08","modified_gmt":"2022-10-14T15:50:08","slug":"irs-offers-penalty-relief-for-2019-2020-tax-years","status":"publish","type":"post","link":"https:\/\/www.sfw.cpa\/news-and-guides\/irs-offers-penalty-relief-for-2019-2020-tax-years\/","title":{"rendered":"IRS offers penalty relief for 2019, 2020 tax years"},"content":{"rendered":"

<\/head><\/p>\n

<\/p>\n

While the recently announced student loan debt relief has captured numerous headlines, it\u2019s estimated that another federal relief program announced on the same day will provide more than $1.2\u00a0billion in tax refunds or credits. Specifically, IRS Notice\u00a02022-36 extends penalty relief to both individuals and businesses who missed the filing deadlines for certain 2019 and\/or 2020 tax and information returns. The relief covers many of the most commonly filed forms.<\/p>\n

Broad relief for late taxpayers <\/strong><\/p>\n

The intent behind the penalty relief is two-fold: 1)\u00a0to help taxpayers negatively affected by the COVID-19 pandemic, and 2)\u00a0to allow the IRS to focus on processing backlogged tax returns and taxpayer correspondence. As recently as late May\u00a02022, the IRS had a backlog of more than 21\u00a0million unprocessed paper returns. The goal is for the IRS to return to normal operations for the 2023 filing\u00a0season.<\/p>\n

To that end, the notice provides relief from the failure-to-file penalty. The penalty is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. To qualify for the relief, an income tax return must be filed on or before Sept.\u00a030, 2022.<\/p>\n

Banks, employers and other businesses that are required to file various information returns (for example, the Form\u00a01099 series) also may qualify for relief. Eligible 2019 returns must have been filed by Aug.\u00a03, 2020, and eligible 2020 returns must have been filed by Aug.\u00a02, 2021.<\/p>\n

Potentially eligible forms include:<\/p>\n

\n
Form\u00a01040, \u201cU.S. Individual Income Tax Return,\u201d and other forms in the Form\u00a01040 series<\/li>\n
Form\u00a01041, \u201cU.S. Income Tax Return for Estates and Trusts,\u201d and other forms in the Form\u00a01041\u00a0series<\/li>\n
Form\u00a01065, \u201cU.S. Return of Partnership Income\u201d<\/li>\n
Returns filed in the Form\u00a01120 series including:\n
\n
Form\u00a01120, \u201cU.S. Corporation Income Tax Return\u201d<\/li>\n
Form\u00a01120-C, \u201cU.S. Income Tax Return for Cooperative Associations\u201d<\/li>\n
Form\u00a01120-F, \u201cU.S. Income Tax Return of a Foreign Corporation\u201d<\/li>\n
Form\u00a01120-FSC, \u201cU.S. Income Tax Return of a Foreign Sales Corporation\u201d<\/li>\n
Form\u00a01120-H, \u201cU.S. Income Tax Return for Homeowners Associations\u201d<\/li>\n
Form\u00a01120-L, \u201cU.S. Life Insurance Company Income Tax Return\u201d<\/li>\n
Form\u00a01120-ND, \u201cReturn for Nuclear Decommissioning Funds and Certain Related\u00a0Persons\u201d<\/li>\n
Form\u00a01120-PC, \u201cU.S. Property and Casualty Insurance Company Income Tax Return\u201d<\/li>\n
Form\u00a01120-POL, \u201cU.S. Income Tax Return for Certain Political Organizations\u201d<\/li>\n
Form\u00a01120-REIT, \u201cU.S. Income Tax Return for Real Estate Investment Trusts\u201d<\/li>\n
Form\u00a01120-RIC, \u201cU.S. Income Tax Return for Regulated Investment Companies\u201d<\/li>\n
Form\u00a01120-SF, \u201cU.S. Income Tax Return for Settlement Funds (Under Section\u00a0468B)\u201d<\/li>\n
Form\u00a01120-S, \u201cU.S. Income Tax Return for an S\u00a0Corporation\u201d<\/li>\n<\/ul>\n<\/li>\n
Form\u00a01066, \u201cU.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return\u201d<\/li>\n
Forms concerning exempt organizations<\/li>\n
Certain international information returns<\/li>\n<\/ul>\n
Notably, the relief doesn\u2019t extend to failure-to-file penalties for Form\u00a08938, \u201cStatement of Specified Foreign Financial Assets,\u201d or FinCEN Report\u00a0114, \u201cReport of Foreign Bank and Financial Accounts.\u201d<\/p>\n
Exceptions to the rule <\/strong><\/p>\n
Some other exceptions apply. Penalty relief isn\u2019t available if:<\/p>\n
\n
A fraudulent return was filed,<\/li>\n
The penalty was part of an accepted offer-in-compromise or a closing agreement with the IRS, or<\/li>\n
The penalty was finally determined by a court.<\/li>\n<\/ul>\n
In addition, the IRS isn\u2019t providing relief for the failure-to- pay <\/em> penalty or other penalties. Such ineligible penalties may, however, qualify for previously existing penalty relief procedures, including the reasonable cause defense or the IRS\u2019s First Time Abatement Program.<\/p>\n
No action required <\/strong><\/p>\n
The penalty relief is automatic. If you qualify, you need not apply for it or reach out to the IRS in any way. Penalties that have already been assessed will be abated. If you\u2019ve already paid a covered penalty, the IRS says, you should receive a refund or credit by Sept.\u00a030, 2022.<\/p>\n
\u00a9 2022<\/em><\/p>\n
<\/body>
\n<\/html><\/p>\n","protected":false},"excerpt":{"rendered":"
While the recently announced student loan debt relief has captured numerous headlines, it\u2019s estimated that another federal relief program announced on the same day will provide more than $1.2\u00a0billion in tax refunds or credits. Specifically, IRS Notice\u00a02022-36 extends penalty relief to both individuals and businesses who missed the filing deadlines for certain 2019 and\/or 2020 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,59,10],"tags":[8,11,12],"class_list":["post-16357","post","type-post","status-publish","format-standard","hentry","category-articles","category-etra","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16357"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16357\/revisions"}],"predecessor-version":[{"id":16358,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16357\/revisions\/16358"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}