IRS helps taxpayers by providing penalty relief on nearly 5 million 2020 and 2021 tax returns with unpaid balances
In a major step to help people who owe back taxes, the IRS announced new penalty relief for approximately 4.7 million individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic.
The relief will total about $1 billion and most of those receiving it make under $400,000 a year.
Given the unusual situation due to the pandemic, the IRS is taking several steps in advance of resuming normal collection notices for tax years 2020 and 2021 to help taxpayers with unpaid tax bills. They include:
- Issuing a special reminder letter starting next month
- Taking steps to waive the failure-to-pay penalties for eligible taxpayers affected by this situation for tax years 2020 and 2021
This penalty relief is automatic. Eligible taxpayers don’t need to take any action to get it.