How to get your share of the $1.2B in late-filing penalties that IRS is refunding
More than a million U.S. citizens who filed their taxes late in the early days of the COVID-19 outbreak are receiving refunds from the Internal Revenue Service, but time is running out for them to receive the money.
To the tune of $1.2 billion, or about $750 per filer, refunds and credits will be issued automatically to over 1.6 million taxpayers.
Fewer than a month remains to submit an application for the subsidy. Individual taxpayer tax returns must be filed by September 30, 2022, in order for Americans to collect the money.
Individuals who fail to file their returns by the due date without first requesting an extension may be subject to a failure-to-file penalty of up to 25% of the tax that is owed, assessed at the rate of 5% per month on the unpaid balance. However, the tax collection agency is eliminating that penalty for many individuals and businesses who filed their returns for 2019 and 2020 late.
Last month, IRS Commissioner Chuck Rettig issued a statement saying, “The penalty relief issued today is yet another way the agency is supporting people during this unprecedented time,” Those who are eligible for the penalty waiver will receive it automatically and without having to make any additional phone calls.
The IRS specifies that individual, business, estate, and trust tax returns are all valid options. The late filing penalty will be waived for those who have not yet paid it, and those who have will receive a refund or credit for the amount they paid.
The majority of refunds, the agency claimed, will be paid out by September’s end.
The IRS is now working through a large backlog of tax returns, so this statement comes at an inopportune time. Approximately 7.6 million paper returns were among the 9.3 million individual tax returns that the IRS had yet to complete as of August 12.
The backlog of unprocessed returns can be traced back to complications brought on by the pandemic, such as a lack of available workers, the monumental task of issuing millions of stimulus checks, and the need to adjust to new regulations brought about by the various COVID-19 relief packages, such as increased payments for children’s tax credits.
The IRS has set a target date of December 31, 2022, for reaching “healthy” inventory levels.
Where’s My Refund is a service provided by the Internal Revenue Service that allows you to monitor the progress of your refund.