Waiver of late income tax fees ends this Friday

Published: Sep. 27, 2022 at 3:39 PM PDT
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RENO, Nev. (KOLO) - On August 24, 2022, the IRS made a unique announcement many had never heard before.

The tax collection agency said it would waive late fees for those who did not file taxes in 2019 or 2020. In addition, the agency said, it would refund late fees to taxpayers who paid those fees in those same years.

“I don’t think it was widely publicized,” says Bruce MacKinnon with Jackson Hewitt. “It wasn’t as widely disseminated as tax things might often be,” he says. MacKinnon says the move impacts about 1.2 million people nationwide.

He suspects many of them don’t know about this grace period. But they need to be aware of it as the deadline to file and take advantage of this waiver is Friday, September 30th at 11:59:59. There are no exceptions.

“Personally I’ve had one individual who came in and had a corporate return,” says MacKinnon. “So, we did the return and he will avoid the penalties associated with late filing,” he says.

MacKinnon says those who want help in filing their late returns will need all the standard paperwork like deductions, certain payments and a W2 form.

For those who don’t have the form check with the Human Resources Department at work for a copy. Another option is logging into the IRS website and getting a history of returns. It’s too late he says for the IRS to mail you a copy of the W2.

This waiver applies to individuals and small corporations who use a 1120 form to file their taxes. Partnerships or other corporations who use other tax forms don’t qualify.

Those who paid a late fee in 2019 and 2020 can anticipate their refund on or around September 30th.

MacKinnon says late fees can add up depending upon how much taxes are owed.

“It is a penalty of 5% per month of the unpaid tax balance,” says MacKinnon. “And it is capped at five months or 25%. So, if you owed $10,000 in back taxes, five months later you have a tax balance of $2500,” he says.

While late fees are waived until September 30, MacKinnon says the waiver does not apply to taxes owed to the IRS in 2019 and 2020.