IRS Zaps Nearly $1 Billion in Penalties for Taxpayers
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Americans who owe back taxes will be given an incentive to pay up after the Internal Revenue Service said Tuesday it would waive nearly $1 billion in late-payment penalties.
Roughly 4.6 million individual taxpayers who owe for tax years 2020 and 2021 will be eligible for the penalty relief. The IRS is extending the olive branch because it stopped sending out many collection letters during the pandemic. It hoped the letter halt would help struggling taxpayers and reduce its backlog.
The long absence of these computer-generated letters had big consequences for taxpayers. Americans’ debt on unpaid back taxes had been growing with interest and penalties, and many were likely in the dark about just how much they owed.