1.6 million taxpayers receiving special refunds, IRS announces: Do you qualify?

Source al.com

The Internal Revenue Service is refunding some $1.2 billion to taxpayers who paid late penalties during the COVID-19 pandemic.

The tax agency announced this week it was abating certain penalties for people and businesses who filed 2019 and 2020 returns late. It is also providing refunds or credits to some 1.6 million taxpayers who already paid the penalties.

Those payments will be completed by the end of September, the IRS said. The refunds will average about $750 per person, though some may receive more, some less. To qualify, individual tax returns must be filed by Sept. 30.

“Throughout the pandemic, the IRS has worked hard to support the nation and provide relief to people in many different ways,” IRS Commissioner Chuck Rettig said. “The penalty relief issued is yet another way the agency is supporting people during this unprecedented time. This penalty relief will be automatic for people or businesses who qualify; there’s no need to call.”

Taxpayers who file returns late without an extension typically pay penalties of up to 25%.

Penalty relief is not available in all situations, including where a fraudulent return was filed or when it was assessed as part of a compromise agreement and will only cover specific penalties. You can go here to see the complete list of qualifying penalties.