Late Filing Penalty Relief for 2019 and 2020 Returns to Generate Automatic Refunds

August 24, 2022 by 2 Comments
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Today the IRS issued a press release announcing extremely broad late filing penalty relief for the 2019 and 2020 taxable years. Importantly, relief is being applied automatically, and taxpayers do not need to take any action to receive a refund of penalties they paid.

Notice 2022-36 details the specific tax returns and penalties for which relief is provided. Returns must be filed by September 30, 2022 to qualify for relief.

The notice also explains the government’s rationale for providing relief, citing the President’s coronavirus pandemic emergency declaration as well as the pandemic’s impact on IRS operations and return processing backlog. The notice states, “the Treasury Department and the IRS have determined that the penalty relief described in this notice will allow the IRS to focus its resources more effectively, as well as provide relief to taxpayers affected by the COVID-19 pandemic.”

Kudos to the IRS for making relief automatic. The press release indicates that most refunds will be issued by the end of September.

Edited to add: the National Taxpayer Advocate blog has a very good summary of the relief provided.

Filed Under: Civil Penalties, Disaster
Christine Speidel About Christine Speidel

Christine Speidel is Associate Professor and Director of the Federal Tax Clinic at Villanova University Charles Widger School of Law. Prior to her appointment at Villanova she practiced law at Vermont Legal Aid, Inc. At Vermont Legal Aid Christine directed the Vermont Low-Income Taxpayer Clinic and was a staff attorney for Vermont Legal Aid's Office of the Health Care Advocate.

Comments

  1. RONALD MARINI says
    August 24, 2022 at 3:43 pm

    However, As Currently Drafted, Only Corporations And Partnerships Are Entitled To This Relief For Late Filing Penalties For Form 5471 & Form 5472!

    Ron Marini,Esq.
    TaxAid.com

    Reply
    • Christine Speidel Christine Speidel says
      August 24, 2022 at 4:20 pm

      Yes, good point. The notice specifies that it applies to “Penalties systematically assessed when a Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, and/or Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, is attached to a late-filed Form 1120 or Form 1065”

      Reply

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