IRS To Waive $1 Billion Penalties For Back Taxes In 2020 And 2021

The Internal Revenue Service (IRS) has announced that it will waive penalty fees for individuals, businesses, and tax-exempt organizations with back taxes totaling less than $100,000 per year for tax years 2020 and 2021.

This announcement serves as a one-time relief due to the exceptional circumstances caused by the pandemic.

This relief is applicable to nearly 5 million eligible entities, most of which earn less than $400,000 annually, according to the Associated Press (AP).

The IRS' decision to forgive failure-to-pay penalties is attributed to the temporary suspension of automated reminders for overdue tax bills during the pandemic.

The pause in automated reminders, initiated in February 2022, led to the accrual of failure-to-pay penalties for taxpayers who did not fully pay their bills in response to initial notices.

While the IRS plans to resume sending normal collection notices, this announcement serves as a one-time relief due to the exceptional circumstances caused by the pandemic.

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