IRS Announces Refunds for Almost 5 Million Taxpayers – Unveiling Amounts and Reasons

IRS-Announces-Refunds-For-Almost-5-Million-Taxpayers-Unveiling-Amounts-And-Reasons

The Internal Revenue Service (IRS) is providing penalty relief totaling $1 billion to nearly 5 million individuals and businesses, following the suspension of overdue tax bill reminders. 

The IRS declared on Tuesday its intention to grant relief to approximately 4.7 million entities, including individuals, businesses, and tax-exempt organizations, to which automated collection reminders were not sent during the pandemic. 

How Does The IRS Refund Work?

The relief is granted automatically, requiring no action on your part to receive it.

If you have already settled your penalty, the IRS will either issue a refund or apply the payment as a credit toward another outstanding tax liability.

To view the refund or credit, you can refer to your tax transcript, where your tax records are accessible.

Refunds for individuals are currently being processed, and the process will continue through January for business accounts. 

Trusts, estates, and tax-exempt organizations can expect adjustments in late February to early March.

It is important to note that while the penalties are being waived, the associated taxes remain due and payable.

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Who Meets the Eligibility Criteria?

IRS-Announces-Refunds-For-Almost-5-Million-Taxpayers-Unveiling-Amounts-And-Reasons
The Internal Revenue Service (IRS) is providing penalty relief totaling $1 billion to nearly 5 million individuals and businesses, following the suspension of overdue tax bill reminders.

The IRS has specified that approximately 5 million tax returns, submitted by 4.7 million entities, including individuals, businesses, trusts, estates, and tax-exempt organizations, qualify for relief, equating to about $206 per return. 

The IRS is granting a waiver for penalties related to tax years 2020 and 2021.

Nearly 70% of the eligible individuals earning relief have an annual income below $100,000. The relief is applicable to those who filed specific Forms 1040, 1120, 1041, and 990-T income tax returns, revealing an assessed tax of less than $100,000. 

Moreover, the recipients must have been in the IRS collection notice process or received an initial balance due notice between February 5, 2022, and December 7, 2023.

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