IRS is granting tax relief to almost 5 million taxpayers

The Internal Revenue Service (IRS) is providing tax relief to almost 5 million taxpayers. The IRS will provide nearly $1 billion in penalty relief. Most of those receiving the penalty relief earn less than $400,000 a year.

This announcement seeks to help taxpayers deal with potential penalties accrued due to late filing or financial hardship.

However, there is an important change to prepare for: the resumption of collection notices in 2024, marking the end of the pandemic-related pause.

In January, the IRS will begin sending automated collection notices and letters to individuals with tax debts prior to the 2022 tax year, and businesses, tax-exempt organizations, trusts and estates with tax debts prior to 2023, with exceptions for those with debts existing in multiple years.

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Notices and more details of tax relief to almost 5 million taxpayers

The IRS paused these notices and letters earlier due to the pandemic and high inventories, but a gradual resumption will take place in the coming months.

Individual taxpayers in the current 2022 tax year and businesses in the third quarter of 2023 began receiving automated collection notices this fall as the IRS took steps to return to business as usual.

Even with the tax relief for nearly 5 million taxpayers, the IRS pointed out that there are a number of payment options and online tools that can help taxpayers with unpaid tax debt, whether it’s a new tax bill or a long-standing tax debt for an unfiled return.

The full IRS press release is available at: https://www.irs.gov/newsroom/irs-helps-taxpayers-by-providing-penalty-relief-on-nearly-5-million-2020-and-2021-tax-returns-restart-of-collection-notices-in-2024-marks-end-of-pandemic-related-pause


Written by Marcos Ferreira, Content Assistant at Drummond Advisors

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