As part of our commitment to keeping you informed, we’re providing a few vital updates from the IRS that may positively impact your tax situation.
Update: IRS Announces New Penalty Relief Program
In response to the challenges of the COVID-19 pandemic, the IRS has introduced a penalty relief program. This initiative is designed to support taxpayers, especially those with outstanding liabilities for the tax years 2020 and 2021. Here’s what you need to know:
- Who Benefits? Approximately 4.7 million taxpayers are set to benefit, with the program providing around $1 billion in relief. This is particularly aimed at aiding individuals with incomes under $400,000.
- Automatic Relief: If you’re eligible for this relief, there’s no action required from your side. The process is automatic.
- Already Paid Penalties? If you’ve paid penalties for 2020 or 2021, expect a refund or a credit towards other tax liabilities.
Eligibility Criteria
This relief targets individual taxpayers, businesses, trusts, estates, and tax-exempt organizations. Key qualifications include:
- Filing certain tax returns (Forms 1040, 1120, 1041, 990-T)
- Having an assessed tax of less than $100,000
Note: The IRS will soon resume sending collection notices that were paused during the pandemic. These will inform you of any outstanding liabilities and provide options for resolution.
Enhanced IRS Online Tools and Services
To assist taxpayers with unpaid taxes, the IRS has upgraded its online resources. Highlights include:
- New self-help tools, like the IRS Document Upload Tool.
- Improved phone service with a callback feature.
- Bots for handling simple queries.
- Easier processes for setting up or modifying payment plans, requesting transcripts, or managing tax obligations via an IRS Online Account.
Staying Informed and Prepared
It’s crucial to review your tax situation in light of these updates. Stay vigilant for any IRS communications, such as reminder letters or notices.
Need Assistance?
If you have questions or need help navigating these changes, don’t hesitate to contact us. Our team at DMJPS PLLC is here to provide the guidance and support you need.
Jeremy Tomlinson, CPA
Jeremy Tomlinson, CPA, is a Senior Manager at DMJPS CPAs + Advisors in Tax Services. At DMJPS, Jeremy focuses on tax planning and compliance for closely held S-corporations and partnerships, sole proprietorships, and high net worth individuals.