IRS Announces Late Filing Penalty Relief For 2019 and 2020 Tax Returns Filed Before September 30

Press Release - (IR-2022-163)

In recent news the IRS has announced that, individual taxpayers and businesses, impacted by the pandemic may qualify for a late filing penalty relief, provided their tax returns for the years 2019 and 2020 are filed on or before the filing deadline on September 30, 2022. This relief applies to Form 1040, US Individual Income Tax Return and Form 1120, US Corporation Income Tax Return series, as well as others listed in the Notice 2022-36, issued by the IRS. Further, taxpayers who file during the first few months after the filing deadline, would qualify for partial penalty relief, because the penalty for eligible returns would start accruing from October. 1, 2022, instead of the return’s original due date. However, the failure to pay penalty and interest stands applicable to unpaid taxes, based on the return’s original due date.

The IRS has also qualified that, the penalty relief is not available under the following circumstances:

  • for applicable international information returns when the penalty is part of an examination;

  • for filing of returns for the year 2021; and

in situations where, a fraudulent return was filed, or where the penalties were part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court.  This make sense given the nature of these specific situations.

However, for ineligible penalties, such as the failure-to-pay penalty, taxpayers could use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First-Time Abate program. The IRS has also announced that, eligible taxpayers who have already filed their return do not need to apply for it, and those filing presently, do not need to attach a statement or other documents to their return. Further, those who have already paid the penalty are eligible for refunds, which will be processed by end of September, 2022.

Wilson Tax Law Group, APLC is an Orange County law firm specializing in Federal and State tax audits, internal compliance, FBAR, offshore bank account disclosures, and criminal tax, including appeals, trials, and collections. The Los Angeles and San Francisco Daily Journals have named Wilson Tax Law Group, APLC as one of the “Top 20 Boutique Firms in California”.

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Fareedeh Wilson
Press Relations
Wilson Tax Law Group, APLC
Newport Beach, California

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