Summary

The IRS is resuming the mailing of collection notices in 2024 after a pause due to COVID-19, offering penalty relief for eligible taxpayers from 2020 and 2021, with an automatic waiver for those with assessed taxes under $100,000.

Abstract

The IRS had temporarily halted sending automated reminders for unpaid taxes in February 2022 due to the COVID-19 pandemic but will restart this practice by March 2024. Taxpayers who have not paid their full tax bills after the initial notice may face failure-to-pay penalties. However, the IRS is providing relief by waiving these penalties for eligible taxpayers from the 2020 and 2021 tax years. This relief applies to individuals, corporations, trusts, estates, and tax-exempt organizations with assessed income tax under $100,000, who received an initial balance due notice by December 7, 2023. The IRS estimates that about 5 million returns will benefit from this penalty reduction, saving taxpayers approximately$ 1 billion. Eligible taxpayers will receive a reminder letter detailing their liability, payment options, and potential penalty reductions. The relief is automatic, and those who qualify do not need to take any action. Taxpayers who have already paid their entire balance will also receive a refund or credit. For those who do not qualify for automatic relief, options such as reasonable cause or First-Time Abate penalty relief are available.

Opinions

The IRS's decision to resume collection notices in 2024 indicates a return to pre-pandemic tax enforcement practices.
The provision of penalty relief for eligible taxpayers is seen as a supportive measure, acknowledging the financial challenges faced during the pandemic.
The automatic waiver for those with assessed taxes under $100,000 demonstrates a targeted approach to offering financial assistance.
The expectation that this relief will benefit approximately 5 million returns and save taxpayers $1 billion reflects a significant impact on the taxpayer community.
Encouraging taxpayers to visit investortaxhelp.com for resolution services suggests a proactive stance on helping taxpayers manage their liabilities.
The mention of an AI service recommendation at the end of the article implies an endorsement for cost-effective alternatives to existing AI services like ChatGPT Plus (GPT-4).

Prop Firm Traders Beware of the IRS Mailing Collection Notices!

The IRS stopped sending automated reminders to pay outstanding taxes in February 2022 owing to the COVID-19 outbreak.

These reminders usually followed the initial notice.

Although these reminder messages were suspended, taxpayers who did not fully pay their bills after the initial balance due notice still face the failure-to-pay penalty.

The IRS will resume collection notifications in 2024, with some taxpayers receiving a reminder letter.

Reminders will be mailed until March 2024.

Delinquent taxpayers may be surprised by this communication as the IRS has not contacted them in over a year.

A unique reminder letter will inform taxpayers of their liability, convenient payment options, and penalty reduction, if applicable, in the first correspondence.

The IRS is waiving failure-to-pay fines for qualifying taxpayers in 2020 and 2021.

The IRS expects 5 million tax returns from 4.7 million individuals, corporations, trusts, estates, and tax-exempt organizations to qualify for penalty reduction.

This saves taxpayers $1 billion, or $206 for every return.

The relief is limited to eligible taxpayers’ tax additions for nonpayment during the relief period.

Any taxpayer is an “eligible taxpayer”:

Whose assessed income tax for 2020 or 2021, as of December 7, 2023, is less than $100,000, excluding taxes, penalties, and interest;

Who received an initial balance due notification for 2020 or 2021 by December 7, 2023; and

Who is otherwise liable during the relief period for tax adds for failing to pay a penalty on an eligible 2020 or 2021 return?

This penalty remission is automatic.

Taxpayers who qualify don’t need to do anything.

Relief will also be given to eligible taxpayers who paid their entire balance.

For 2020 and 2021 failure-to-pay fines, the IRS will refund or credit the payment toward another tax liability.

Individuals, businesses, trusts, estates, and tax-exempt organizations that filed certain Forms 1040, 1120, 1041, and 990-T income tax returns for 2020 or 2021 with an assessed tax of less than $100,000 and were in the IRS collection notice process or issued an initial balance due notice between Feb. 5, 2022, and Dec. 7, 2023, are eligible.

The IRS says the $100,000 maximum applies per return and company.

For relief-eligible taxpayers, the failure-to-pay penalty resumes on April 1, 2024.

Taxpayers not qualified for automatic relief may have options.

They can request for reasonable cause or First-Time Abate penalty relief.

If you owe money from 2020 or 2021, visit investortaxhelp.com for help resolving it through an installment plan with the IRS or an offer-in-compromise.