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Good News! The IRS gives Penalty Relief for Certain Taxpayers Filing Returns for Taxable Years 2019 and 2020

The IRS released Notice 2022-36 which waives the late fees and penalties for all 1099 Series returns (NEC, MISC, DIV, INT, et al) for tax years 2019 and 2020 that are filed on or before September 30, 2022.

This IRS Notice also AUTOMATICALLY waives late fees and penalties for most income tax returns filed for tax year 2019 (filed on or before August 1, 2020) and tax year 2020 (filed on or before August 1, 2021).  A taxpayer is eligible for the waiver as long as they can show that the failure to timely file the return or to furnish the required information is due to reasonable cause.  The returns affected are:

  • 1040
  • 1041
  • 1120, including 1120-C and 1120-S
  • 1065
  • 990-PF, 990-T

Taxpayers do not need to request relief and the IRS said it would refund most of the fees/penalties or apply credits by the end of September.

The IRS remains severely backlogged due to the COVID-19 pandemic.  The waiving of these fines and penalties hopefully allows IRS workers to focus their resources more effectively while working to return to normal operations.

Notice 2022-36 does NOT give penalty relief for those returns which are fraudulently or that are willfully in the “non-filing” category.

The AICPA certainly welcomes these changes and they have requested that the IRS expand the relief deadline to December 31, 2022.  At this time, there has been no change in the September 30, 2022 time frame.

Please contact your Wegner CPAs advisor if you have questions on this penalty relief.

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