Central Oregon DailyIRS refunding $1.6 billion to some who filed tax returns late during...

IRS refunding $1.6 billion to some who filed tax returns late during COVID-19

IRS refunding .6 billion to some who filed tax returns late during COVID-19

Woman hands money for a purchase

The Internal Revenue Service may be sending some money your way in the coming days. But for some, there is a deadline coming up to take advantage of it.

The IRS recently announced that it is sending $1.6 billion total to 1.2 million Americans and businesses who filed certain 2019 and 2020 tax returns late.

The refund applies to the failure to file penalty, which is 5% per month up to 25% of the unpaid tax when a federal income tax return is filed late. 

“This relief applies to forms in both the Form 1040 and 1120 series, as well as others listed in Notice 2022-36,” the IRS said.

RELATED: Inflation still high: Here’s how to get more money in your paycheck now

The payments are automatic, the IRS said, and should be completed by Sept. 30.

However, to qualify for the refund, those eligible income tax returns must be filed by Sept. 30.

The IRS said this refund will also help the agency focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.

Here is more from the IRS press release:

In addition, the IRS is providing penalty relief to banks, employers and other businesses required to file various information returns, such as those in the 1099 series. To qualify for relief, the notice states that eligible 2019 returns must have been filed by August 1, 2020, and eligible 2020 returns must have been filed by August 1, 2021.

Because both of these deadlines fell on a weekend, a 2019 return will still be considered timely for purposes of relief provided under the notice if it was filed by August 3, 2020, and a 2020 return will be considered timely for purposes of relief provided under the notice if it was filed by August 2, 2021. The notice provides details on the information returns that are eligible for relief.

The notice also provides details on relief for filers of various international information returns, such as those reporting transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations. To qualify for this relief, any eligible tax return must be filed on or before September 30, 2022.

Relief is automatic; most of $1.2 billion in refunds delivered to eligible taxpayers by next month

Penalty relief is automatic. This means that eligible taxpayers need not apply for it. If already assessed, penalties will be abated. If already paid, the taxpayer will receive a credit or refund.

As a result, nearly 1.6 million taxpayers who already paid the penalty are receiving refunds totaling more than $1.2 billion. Most eligible taxpayers will receive their refunds by the end of September.

Penalty relief is not available in some situations, such as where a fraudulent return was filed, where the penalties are part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court. For details, see Notice 2022-36, available on IRS.gov.

This relief is limited to the penalties that the notice specifically states are eligible for relief. Other penalties, such as the failure to pay penalty, are not eligible. But for these ineligible penalties, taxpayers may use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First Time Abate program. Visit IRS.gov/penaltyrelief for details.

“Penalty relief is a complex issue for the IRS to administer,” Rettig said. “We’ve been working on this initiative for months following concerns we’ve heard from taxpayers, the tax community and others, including Congress. This is another major step to help taxpayers, and we encourage those affected by this to review the guidelines.”

CentralOregonDaily.com
CentralOregonDaily.comhttps://centraloregondaily.com/
Central Oregon Daily is Television in Central Oregon … on-air, on-line & on-the-go. We are KOHD – Central Oregon’s ABC, KBNZ – CBS for Central Oregon, and local programming on Central Oregon Daily, COTV and CO4 Visitors Network. We are storytellers of all that matters to Central Oregonians.

Subscribe Today

GET EXCLUSIVE ACCESS TO CONTENT

SUPPORT LOCAL JOURNALISM

NEWS FROM 30+ MEDIA SOURCES

250,000+ LOYAL READERS EACH YEAR

Get unlimited access to our news content and our archive of Central Oregon stories.

Top Stories

More Articles