I’m Bette Hochberger, CPA, CGMA, and on today’s Tax Tip Tuesday, we’re going to talk about some penalty relief from the IRS.
Now it’s been a crazy couple of years and the IRS has certainly had its share of problems during all of what’s been going on. You might remember when the pandemic really first hit they were moving deadlines, it was very chaotic, very crazy, and even with extending those deadlines, there were a lot of people that still couldn’t manage to get their stuff together in time and file. And you could have filed extensions and still file later as usual but it’s been rough, it’s been a rough time, hard to get information, hard to get all your stuff together to get to your CPA or tax preparer, et cetera.
So the IRS did come out and they said that there was a notice called the 22-36 that if you filed a late 2019 or 2020 tax return that they are going to remove the penalty. We call it a penalty abatement in the CPA world. So this is huge. If you filed things late or if you got a letter from the IRS that said that there is a failure-to-file penalty that was assessed, and if you already paid it even these are all either getting removed or they’re going to be refunded. It’s automatic; you don’t have to call the IRS, you don’t have to send a letter; it’s supposed to happen by the end of September, they’re saying it’s $1.2 billion of refunds to taxpayers who received this failure to file penalty.
There are some other little caveats to this. There are other different types of relief that they’re giving, but it’s really just, “Did you file late?” If you filed late, they are removing those penalties for the 2019 and 2020 tax years.
Now, something else that was part of that, I think it’s part of that same notice. Yep, it’s part of notice 2022-36. Also, if you had certain international information return penalties right, and if you need to file what we call the FBAR, if you have a foreign bank account with an over $10,000 balance and you have to file that return every year, it’s the Fin-sen, it’s a little bit strange it’s not really for taxes. Still, a lot of times your CPA might ask you about if you have a foreign account. Returns like those, they’re also getting penalty relief and that’s huge because those are very, very, very big penalties. You’re talking a $10,000 penalty for not filing those returns. So that’s huge news.
It hopefully will take some of that burden off of the IRS so you don’t have to keep calling and waiting on hold for hours, or trying to send letters that feel like they go right into the garbage can. It’s supposed to all happen automatically. So if you know had one of those penalties and you don’t get a refund by the end of September probably wait a couple of weeks and then you might have to try calling again afterward, but hopefully, fingers crossed everybody who’s entitled gets it.
And that’s it, that’s all I have for you. So if you are one of those people suffering from these penalties, I hope you get it. And if you have any other questions drop a comment, and throw us a like. We’ll see you next time.