The IRS has announced broad-based penalty relief for certain 2019 and 2020 returns due to the COVID-19 pandemic.
The penalty relief will be automatic for people and businesses who qualify. Relief applies specifically to the failure to file penalty. This penalty is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late.
Relief is also available for various information returns, such as those in the Form 1099 series. The IRS Notice 2022-36 also provides details on relief for filers of various international information returns.
Penalties that have already been assessed will be abated. If already paid, the taxpayer will receive a credit or refund.