IRS Waives 2019 and 2020 Late Filing Penalties

The IRS has waived late filing penalties for 2019 and 2020 taxes.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

Who does this apply to?

You may be eligible to have late filing penalties waived or refunded for your:

  • 2019 tax return (due in 2020)
  • 2020 tax return (due in 2021)

The waiver does not apply to 2021 taxes due in 2022.

Eligible filers include:

  • Individuals
  • Pass-through businesses
  • Corporations filing Form 1120
  • S-corporations filnig Form 1120-S

Certain other late filing penalties are often being waived including businesses that didn’t issue 1099s on time. See IRS Notice 2022-36 for more information.

What do I need to do to receive this waiver?

If you already filed your tax return, you don’t need to do anything. The IRS will automatically waive the penalties.

If you didn’t file your tax return, you must file by September 30, 2022 to be eligible for the waiver. You don’t need to include anything with your tax return. When the IRS receives it, it won’t add the penalty.

What happens if I already paid the penalty?

If you already paid the penalty, you will receive an automatic refund. The IRS says most refunds will be issued by the end of September.

If you’ve moved since filing your tax return, you should immediately update your address with the IRS if you haven’t already.

The IRS has not said whether they will use direct deposit or send a check if you normally get your refund by direct deposit. If you’ve changed banks, the IRS usually doesn’t have a way for you to update your bank account. Instead, when your closed bank account rejects the deposit, the IRS will mail you a check.

Does this apply to late payment penalties?

This penalty waiver or refund only applies to the penalty for filing your tax return late. It does not apply to the separate penalty for paying your taxes late.

If you still owe money, the IRS may apply your late filing penalty refund to your remaining balance instead of sending you a refund. You may also want to consider requesting a payment plan to help you pay off what you owe.

Why is this penalty waiver happening?

The stated purpose given by the IRS is to help taxpayers who struggled with the impact of COVID-19.

I suspect it also has a lot to do with IRS processing delays and them having difficulty figuring out who did or didn’t file on time.

What should you do if you don’t receive your penalty refund?

The IRS hasn’t announced a special website to check your penalty refund status. It will probably appear on your online tax transcript for the tax year(s) that you filed late.

If you don’t receive your payment when the IRS says they sent it or the refund doesn’t appear on your account when you think you were eligible, you will probably have to call the IRS.

Yes, they probably won’t answer the phone. Try late on Friday or first thing in the morning. The worst times to call are lunch or at the end of the day when many people have a break or get off of work.

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