In the early days of the COVID-19 pandemic, the Internal Revenue Service is distributing refunds to more than one million Americans who submitted their taxes late. The EPA announced Monday that taxpayers had until September 30 to take advantage of this respite.
Those who submit their tax returns late without asking an extension can expect to pay up to 25 percent of the taxes they owe as penalties. For 2019 and 2020, however, the government will suspend late filing fines. The IRS stated that taxpayers who have already paid a penalty will automatically receive refunds.
More than 1.6 million taxpayers will receive refunds or credits totaling $1.2 billion, or an average of $750 per individual, with some receiving more and some receiving less.
The IRS stated that taxpayers who have already filed their returns are exempt from further action. Those who have previously paid a fine will receive a refund or credit. According to the organization, most refunds will be delivered by the end of September.
Penalties can still be waived for taxpayers who have not filed taxes for 2019 and 2020 as long as they file by September 30, 2022. This gives late filers little more than two weeks to complete pending tax returns.
How to dodge the latest wave of scammers posing as the IRS 02:44 Jill on Money
According to the IRS, this initiative aims to “assist struggling taxpayers afflicted by the COVID-19 outbreak.” The move could also aid the agency, which is attempting to clear an enormous backlog of unprocessed tax returns.
The epidemic has had a “extraordinary” impact on the tax agency, the IRS stated in a notice, emphasizing the agency’s involvement in delivering federal stimulus payments and taking other measures to assist taxpayers in surviving the pandemic.
The IRS might gain from the elimination of late-filing fines by focusing on reducing its backlog of tax documents and returning to normal for the 2023 tax season.
More