This is going to be a huge benefit to many filers. For those taxpayers, including individual 1040 returns, partnership (1065) returns and S Corporation (1120S) that:
- Filed late and paid a penalty or owe a penalty for late filing for the 2019 and/or 2020 tax year, or
- Have not yet filed their 2019 and/or 2020 tax returns,
These taxpayers may see relief from failure to file penalties for those 2 years.
If you already paid a penalty, the IRS says the monies will be returned by the end of September. No action on the part of the taxpayer is necessary.
If the 2019 or 2020 returns not mentioned above have not been filed, the taxpayer will still be eligible for the relief if the return is filed by Sept. 30 of this year.
More details can be seen in Notice 2022-36 which was released by the IRS on Wednesday.
I’m sure there will be more information forthcoming in the next few days but this could help taxpayers save hundreds or even thousands of dollars off their tax bill.
BUT IF YOU HAVEN’T FILED YET FOR 2019 OR 2020, YOU MUST FILE BY SEPT 30 OF THIS YEAR TO BE ELIGIBLE FOR THE FORGIVENESS.
Also, the notice abates penalties for failure to timely file and information return, such as those in the Form 1099 series, for the 2 tax years. To be eligible, information returns for 2019 must have been filed on or before Aug 3, 2020, and 2020 information returns by Aug. 2, 2021.
Please note that this article is based on what I see today. If this is like other Covid notices, there may be changes that occur as time goes by.
If this situation applies to you, make an appointment with your tax preparer soon.