Ask The California Employment Tax And Payroll Tax Attorney – The IRS Grants Late Filing Penalty Relief For The Years 2019 And 2020
By Robert S. Schriebman
2022
Introduction
On September 23, 2022, the IRS issued a Press Release – IR-2022-163. The press release announced that the IRS will be abating late filing penalties for individual taxpayers and businesses providing tax returns are filed before September 30, 2022. The IRS is being proactive for hardships brought about by the pandemic. The abatement relief is only for late filing penalties and does not apply to late payment penalties. Relief is available for those taxpayers filing individual 1040 returns and corporate 1120 returns and extends to other returns in those classifications such as the 1041 and 1120S. A complete list is set forth in IRS Notice 2022-36. If you file a qualifying return after the September 30th deadline, all is not lost. Taxpayers who file during the first few months after the September 30th deadline will still qualify for partial penalty relief. Again, the failure to pay penalty together with accruing interest still applies and there is no relief for that penalty.
The penalty relief is NOT available under the following:
- For applicable international information returns when the penalty is part of an examination.
- For filing of returns for the year 2021; and
- In situations where, a fraudulent return was filed, or where the penalties were part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court.
What about other penalties, such as the failure to pay penalty? The old rules apply. That is to say, that this penalty, and most others, may be abated using the standards set forth under the reasonable cause criteria. These can be found in the Internal Revenue Manual (IRM) Chapter 20. You should also consult the US Supreme Court’s decision in the Boyle case, Boyle v. US 469 US 241 (1985).
The most common allowable reasons for penalty abatement set forth in the IRM are death, serious illness, or unavoidable absence, as well as fire, casualty, or natural disaster.
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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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