IR-2022-185, October 19, 2022
WASHINGTON ̶ The Inner Income Service reminds taxpayers in areas coated by sure Federal Emergency Administration Company (FEMA) catastrophe declarations they could have extra time to file their returns to qualify for the penalty relief underneath Notice 2022-36PDF for his or her 2019 and 2020 tax returns.
Below Discover 2022-36, penalties for late-filing sure tax returns, in addition to penalties for not reporting sure required data on the Type 1065 or Type 1120-S, are waived or abated if the related return was filed on or earlier than September 30, 2022. However people and households that reside or have a enterprise in lately declared FEMA catastrophe areas have postponed deadlines to file the return to get this reduction, as famous under.
- Areas with a deadline of November 15, 2022, embrace:
- Counties in Missouri recognized underneath FEMA’s Main Catastrophe Declaration 4665.
- Counties in Kentucky recognized underneath FEMA’s Main Catastrophe Declaration 4633.
- The island of St. Croix within the U.S. Virgin Islands.
- Members of the Tribal Nation of the Salt River Pima Maricopa Indian Group.
- Areas with a deadline of February 15, 2023, embrace:
The reduction underneath Discover 2022-36 applies to the failure-to-file penalty that’s sometimes assessed at a fee of 5% per 30 days, as much as 25% of the unpaid tax when a federal revenue tax return is filed late. This reduction applies to kinds in each the Type 1040 and 1120 sequence, in addition to others listed in Notice 2022-36PDF, posted on IRS.gov.
In contrast to the failure-to-file penalty, the failure-to-pay penalty and curiosity will nonetheless apply to any unpaid tax. The failure-to-pay penalty is often 0.5% (one-half-of-one %) per 30 days, as much as 25%. The interest rate is presently 6%, compounded day by day.
Penalty reduction for 2019 and 2020 returns just isn’t accessible in some conditions, comparable to the place a fraudulent return was filed, the place the penalties are a part of an accepted supply in compromise or a closing settlement, or the place the penalties have been lastly decided by a courtroom. This reduction is restricted to the penalties that the discover particularly states are eligible for reduction. For ineligible penalties, such because the failure-to-pay penalty, taxpayers could use present penalty reduction procedures, comparable to making use of for reduction underneath the cheap trigger standards or the First Time Abate program. Go to IRS.gov/penaltyrelief for particulars.
Totally different reduction applies to 2021 returns. Go to the disaster relief web page on IRS.gov for extra details about tax yr 2021.