The IRS is granting about $1 billion in automatic late-payment penalty relief to 4.7 million individuals, businesses, and tax-exempt organizations that were not sent automated collection reminder notices related to 2020 and 2021 tax returns as a result of COVID-19 pandemic relief. (IR-2023-244; IRS Notice 2024-7)
Relief is only available to individuals or entities:
- With assessed income tax of less than $100,000, excluding any applicable additions to tax, penalties, or interest (determined on a per-return basis);
- Who were issued an initial balance due on or before December 7, 2023, for the 2020 or 2021 taxable years; and
- Who are liable for failure-to-pay penalties related to specified eligible returns listed in Notice 2024-7 (Form series 1040, 1041, 1120, and 990-T).
The relief will be automatic and penalties previously paid will be refunded or credited. The relief does not apply to interest accrued.
Adjustments will be made to individual and business accounts in December and January and to trusts, estates, and tax-exempt organizations in late February to early March.
The IRS will issue a notice to each eligible taxpayer that reflects the updated amount owned and any refund or credit due to the taxpayer.
The IRS press release is available at:
IRS Notice 2024-7 is available at:
www.irs.gov/pub/irs-drop/n-24-07.pdf
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