The IRS has announced a new penalty relief program through Notice 2022-36, which will abate penalties for late filing in 2019 and 2020. Optima Tax Relief reviews the program’s objectives, guidelines, and eligibility requirements. Taxpayers who reported transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations also qualify for relief if they file their tax returns by September 30, 2022.
Objectives
To help taxpayers who have struggled financially during the COVID-19 pandemic, the IRS will offer penalty relief to most individuals and businesses who filed 2019 or 2020 tax returns late. Taxpayers who reported transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations also qualify for relief if they file their tax returns by September 30, 2022.
Guidelines
Typically, the penalty for failing to file is 5% of the unpaid taxes for every month, or part of a month, that the tax return is late. The maximum penalty is 25%. The penalty relief program will waive and abate penalties for taxpayers on the following forms and sections:
- Form 1040 series
- Form 1041, 1041-N, and 1041-QFT
- Form 1120 series
- Form 1066
- Form 990-PF and Form 990-T
- Sections 6038, 6038A, 6038C, 6039F, 6677
Eligibility Requirements
Taxpayers who filed their tax returns on or before September 30, 2022 are eligible for this relief program. About 1.6 million taxpayers will automatically receive $1.2 billion in refunds or credits. Taxpayers who reported transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations also qualify for relief if they file their tax returns by September 30, 2022.
Taxpayers who reported transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations also qualify for relief if they file their tax returns by September 30, 2022.
In addition, banks, employers, and some businesses will receive relief. These groups will need to have filed their 2019 returns by August 1, 2020 and their 2020 returns by August 1, 2021.
Taxpayers who reported transactions with foreign trusts, receipt of foreign gifts, and ownership interests in foreign corporations also qualify for relief if they file their tax returns by September 30, 2022.
All eligible parties do not need to apply for relief as it is automatic. Assessed penalties will automatically be abated and paid penalties will automatically be refunded.
Apart from this if you ara interested to know more about Newborn Comfort Cushion review then visit our UNCATEGORIZED category
