The IRS recently announced (Notice 2022-36) that it will automatically abate late filing penalties for 1.6 million taxpayers. The automatic abatement covers specified penalties and returns for tax year 2019 and 2020 that are filed on or before Sept. 30, 2022. The penalty relief includes failure-to file penalties for Forms 1040, 1040-C, 1040-NR, 1040-SR, 1040-SS, 1041, 1041-N, 1041-QFT, 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, 1065, 1066, 990-PF, and 990-T. The penalty relief also includes the following international information return penalties:
- Penalties systematically assessed when a Form 5471 or 5472 is attached to a late-filed Form 1120 or Form 1065
- Penalties assessed by the campus assessment program with respect to Form 3520 and 3520-A filings
- Failure to file Form 1065 or 1120-S
The penalty relief also includes penalties for failure to file certain 2019 and 2020 information returns, such as those in the 1099 series, which are filed on or before Aug. 1, 2020, and Aug. 1, 2021, respectively.
The abatement provides significant relief to affected taxpayers and reduces the IRS burden for administering penalties that arose during the height of the COVID-19 pandemic. Because the abatement is automatic, taxpayers do not need to take any affirmative steps to receive the abatement. Taxpayers who are eligible for abatement and have already paid these penalties will receive a refund as early as late September 2022. The IRS estimates the refunds alone will total $1.2 billion.
The penalty relief provided by the notice does not apply to any penalties in an accepted offer in compromise under Section 7122, nor does it apply to any penalty settled in a closing agreement under Section 7121, or finally determined in a judicial proceeding.
Next steps
Eligible taxpayers with delinquent 2019 and 2020 returns should plan on filing those returns on or before Sept. 30, 2022, to take advantage of this significant penalty relief. This deadline is rapidly approaching, and delinquent taxpayers should now act with urgency to meet this important new deadline.
For more information, contact:
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More flash
No Results Found. Please search again using different keywords and/or filters.