IRS Announces Penalty Relief for Eligible 2019 and 2020 Returns

In Notice 2022-36, the Internal Revenue Service (IRS) announced it will issue automatic penalty relief for certain returns required to be filed for the 2019 and 2020 tax years.

Taxpayers must file the eligible 2019 and 2020 returns by September 30, 2022 to qualify for the relief. For taxpayers who received a notice for a late filing penalty, those will be abated. Furthermore, there is a potential refund for penalties already paid. The IRS is expected to release additional clarity on the refunds available.

Tax Returns Eligible for Penalty Relief

The IRS will abate failure-to-file penalties for the following forms:

• The Form 1040 series
• The Form 1041 series
• The Form 1120 series
• Form 1066
• Form 990-PF
• Form 990-T
• Form 1065
• Forms 5471 and 5472
• The Form 3520 series

The penalty relief mentioned above does not apply to situations where fraud was involved, or if a penalty was already settled under an offer in compromise, a closing agreement or a judicial proceeding.

Questions?

If you have any questions about this relief or received a penalty noticed for failure to file 2019 and/or 2020 tax returns, please consult with your tax advisor.