In anticipation of resuming automated collection notices during 2024, the IRS has announced $1 billion of relief for 4.7 million individuals, businesses, trusts, estates, and tax exempt organizations for late payment penalties where the IRS did not send these taxpayers automated collection reminder notices during the pandemic.
Previously, in February 2022, the IRS announced it was temporarily suspending the mailing of certain automated balance due notices. The IRS continued to send initial balance due notices but not subsequent reminders. Apparently, recognizing that certain taxpayers should not be penalized without having received the reminders, the IRS will be removing their late payment penalties:
- For the period beginning on February 5, 2022, or the date the IRS issued an initial balance due notice, whichever is later, and ending on March 31, 2024;
- In connection with 2020 and 2021 Form 1040 series, 1041 series, 1120 series, and 990-T tax returns having assessed income taxes of less than $100,000;
- For filers who were issued an initial balance due notice between February 5, 2022, and December 7, 2023.
Eligible taxpayers need not do anything to obtain relief. The IRS will automatically remove previously imposed, qualifying late payment penalties. To the extent the penalties were already paid, they will be refunded or credited to other liabilities. However, late payment penalties accruing before and after the relief period are not subject to the relief noted above. Additionally, taxpayers will remain liable for all interest accrued on unpaid liabilities.
For more details, see the IRS notice and fact sheet that accompanied the IRS’s announcement.
© Copyright CBIZ, Inc. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.
“CBIZ” is the brand name under which CBIZ CPAs P.C. and CBIZ, Inc. and its subsidiaries, including CBIZ Advisors, LLC, provide professional services. CBIZ CPAs P.C. and CBIZ, Inc. (and its subsidiaries) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations, and professional standards. CBIZ CPAs P.C. is a licensed independent CPA firm that provides attest services to its clients. CBIZ, Inc. and its subsidiary entities provide tax, advisory, and consulting services to their clients. CBIZ, Inc. and its subsidiary entities are not licensed CPA firms and, therefore, cannot provide attest services.