Insights

The 2025 Expiration of the Benefits of the Tax Cuts and Jobs Act

IRS Commences Processing of Employee Retention Credit Claims; Moves End Date on Processing New Claims to Jan. 1, 2024

Converting an LLC or S Corporation to a QSBS C Corporation to Avoid Federal Taxes on Gain on Sale of Business

New York State Launches Corporate Transparency Act

IRS to Provide $1 Billion of Late Payment
Penalty Relief to Select Taxpayers

In anticipation of resuming automated collection notices during 2024, the IRS has announced $1 billion of relief for 4.7 million individuals, businesses, trusts, estates, and tax exempt organizations for late payment penalties where the IRS did not send these taxpayers automated collection reminder notices during the pandemic.

Previously, in February 2022, the IRS announced it was temporarily suspending the mailing of certain automated balance due notices. The IRS continued to send initial balance due notices but not subsequent reminders. Apparently, recognizing that certain taxpayers should not be penalized without having received the reminders, the IRS will be removing their late payment penalties:

  • For the period beginning on February 5, 2022, or the date the IRS issued an initial balance due notice, whichever is later, and ending on March 31, 2024;
  • In connection with 2020 and 2021 Form 1040 series, 1041 series, 1120 series, and 990-T tax returns having assessed income taxes of less than $100,000;
  • For filers who were issued an initial balance due notice between February 5, 2022, and December 7, 2023.

Eligible taxpayers need not do anything to obtain relief. The IRS will automatically remove previously imposed, qualifying late payment penalties. To the extent the penalties were already paid, they will be refunded or credited to other liabilities. However, late payment penalties accruing before and after the relief period are not subject to the relief noted above. Additionally, taxpayers will remain liable for all interest accrued on unpaid liabilities.

For more details, see the IRS notice and fact sheet that accompanied the IRS’s announcement.

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The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.