The IRS recently reported that it will eliminate certain late fees for taxpayers who have struggled to file their tax returns on time during the pandemic.
The IRS estimates that about 1.6 million taxpayers will receive more than $1.2 billion in penalty relief. Refunds or credits will be automatically issued by the agency for most fees by the end of September.
Tax returns from 2019 and 2020 are eligible for the benefit. To obtain the late fees forgiven, taxpayers must report late information by September 30, 2022.
Penalties for not filing a tax return can be as high as 25% of unpaid fees. The agency said it will not forgive fines for non-payment or cases of fraudulent filings.
The waiver of penalties arising from late filings is the latest IRS measure to promote tax compliance.
According to the IRS, reducing the penalties caused by the pandemic tax seasons will help the agency eliminate accumulated returns that no longer have been processed.