We have some late breaking news for you. First, a reminder about how you can avoid some late-filing penalties. Then, we have an update on what the IRS is doing with the first part of that $80-billion of new federal money that is coming its way.
FILE BY SEPTEMBER 30TH TO SAVE ON LATE FILING PENALTIES
Just a couple of weeks ago the IRS handed thousands of taxpayers a gift. The IRS says it would not impose the late-filing penalties on tax returns for the tax years 2019 and 2020 if they were filed by the end of September. Those late-filing penalties are as much as 5% per month of the unpaid tax and the penalty can be imposed for a total of five months. In short, the IRS is offering non-filers a gift of 25% of their unpaid tax.
Again, you must file those 2019 and 2020 returns by the end of September, which is only about a week away.
Those of you who have already filed your 2019 and 2020 returns but filed late will also be getting a gift from the IRS. The IRS is going to refund to you any late filing penalty that you paid. This refund will be automatic, and you don’t have to do anything to get it.
The cancellation of the late filing penalty for 2019 and 2020 is being made to help taxpayers impacted by the Covid pandemic, says the IRS. Frankly, we don’t know if it was really done because of the Covid pandemic or just because Uncle Sam wants to help out taxpayers with a recession staring us in the face.
While the IRS is dropping the failure to file penalty, other fees and penalties related to failure to pay are not being dropped. But the big nut — that failure to file penalty of 5% per month for 5 months or 25% — is being removed.
IMPORTANT POINTS TO REMEMBER ABOUT THIS PENALTY RELIEF
There are some important points to remember about this penalty relief, and these points were made by the IRS today:
In case you can’t file your 2019 or 2020 returns by September 30th, the IRS says “those who file during the first few months after the September 30 cutoff will still qualify for partial penalty relief. That’s because, for eligible returns filed after that date, the penalty starts accruing on October 1, 2022, rather than the return’s original due date.”
And remember there are other penalties and fees that you will still be stuck with, even if you do avoid the failure to file penalty. The IRS says “unlike the failure-to-file penalty, the failure-to-pay penalty and interest will still apply to unpaid tax, based on the return’s original due date. The failure-to-pay penalty is normally 0.5% (one-half-of-one percent) per month. The interest rate is currently 5% per year, compounded daily, but that rate is due to rise to 6% on October 1, 2022.”
UPDATE ON THE $80-BILLION FOR THE IRS
Our Senior Tax Relief Specialist Tom gave us an update today on what’s happening with the new $80-Billion in federal funding that the IRS will be getting. Yes, he says, the first of the new 87,000 IRS agents are being trained and starting to go to work and for that reason he says expect to see more notices coming from the IRS with more tax enforcement actions.
He also urged taxpayers to catch up on their unfiled tax returns now and to start the ball rolling now for tax debt relief before too many new agents are at work. Here are his comments made during a quick visit this morning at the TaxReliefInfo.org offices:
Remember that our tax resolution specialists offer a free telephone consultation. Call for help and advice about your tax issues. Call if you are missing a refund and our tax experts will help you track it down. Call if you’re interested in the IRS Fresh Start Program, or the IRS Offer In Compromise Program, or the Innocent Spouse Rule. Call if you want to find out about a payment plan with the IRS or if you are facing an audit. Our experts will tell you what you can accomplish on your own and if you need expert guidance our experts will tell you what your options are.
Remember it’s a free telephone consultation so make the call. And file those returns from 2019 and 2020 by September 30th to save the failure to file penalty of as much as 25% of the money you owe.
Call. File. Do it.