The relevant penalties will be waived or, to the extent previously assessed, abated, refunded, or credited. The relief is due to the ongoing COVID-19 pandemic, which was declared by the President as a national emergency on March 13, 2020.
The penalties listed below for the 2019 and 2020 tax year will be automatically abated, refunded, or credited, as appropriate, without any need for taxpayers to request this relief provided such returns are filed on or before September 30, 2022.
1) Additions to tax under IRC section 6651(a)(1) for failure to file the following income tax returns.
- Form 1040 series of returns.
- Form 1041 series of returns.
- Form 1120 series of returns except Form 1120-IC-DISC and Form 1120-S.
- Form 1066.
- Form 990-PF.
- Form 990-T.
2) Certain penalties under IRC sections 6038, 6038A, 6038C, 6039F, and 6677 for failure to timely file the following international information returns (IIRs).
- Penalties systematically assessed when a Form 5471, and/or Form 5472, is attached to a late-filed Form 1120 or Form 1065, and
- Penalties assessed by the campus assessment program with respect to filings on Form 3520.
3) Penalties under IRC section 6698(a)(1) for failure to timely file and under IRC section 6698(a)(2) for failure to show the required information on a Form 1065. 4) Penalties under IRC section 6699(a)(1) for failure to timely file and under IRC section 6699(a)(2) for failure to show the required information on a Form 1120-S.
In addition, the IRS will not impose the penalties under IRC section 6721(a)(2)(A) for failure to timely file any information return (as defined in IRC section 6724(d)(1)) that meets the following criteria.
- 2019 returns that were filed on or before:
- August 1, 2020 (with an original due date of January 31, 2020),
- February 28, 2020 (if filed on paper),
- March 31, 2020 (if filed electronically), or
- March 15, 2020.
- 2020 returns that were filed on or before:
- August 1, 2021 (with an original due date of January 31, 2021),
- February 28, 2021 (if filed on paper),
- March 31, 2021 (if filed electronically), or
- March 15, 2021.
The penalty relief does not apply to any penalty not specifically listed above.
In addition, the penalty relief is not available with respect to any return to which the penalty for fraudulent failure to file under IRC section 6651(f) or the penalty for fraud under IRC section 6663 applies. The penalty relief also does not apply to any penalties in an accepted offer in compromise. The penalty relief also does not apply to any penalty settled in a closing agreement or finally determined in a judicial proceeding.
Note: Penalty relief does not apply to interest charged on paying a tax liability late. The specific penalties listed above apply to late-filing penalties, not late-paying penalties.
