IRS set to send out $1.2 billion in refunds to certain taxpayers

The Internal Revenue Service will send refunds to taxpayers who, because of the COVID-19 pandemic, filed certain 2019 and 2020 tax returns late.

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According to the IRS, the penalty that is being refunded is typically assessed for those who have not filed their return and have not requested an extension. The penalty is set at a rate of 5% per month, up to 25% of the unpaid tax when a federal income tax return is filed late.

This relief applies to forms in both the Form 1040 and 1120 series, as well as others listed in Notice 2022-36, posted on IRS.gov.

More than 1.6 million taxpayers are set to receive refunds or credits totaling $1.2 billion, with an average refund of $750 per person, the IRS said.

To qualify for this relief, an eligible income tax return must be filed on or before Sept. 30, 2022.

If you have filed a return, you do not need to do anything. If you were told you owed a fine, but you have not paid it, you do not need to pay it, the IRS said.

If you have already paid the fine, it will be refunded to you by Sept. 30, the agency said.

Since the relief is automatic, taxpayers do not have to apply to get the money back.

“Throughout the pandemic, the IRS has worked hard to support the nation and provide relief to people in many different ways,” said IRS Commissioner Chuck Rettig. “The penalty relief issued today is yet another way the agency is supporting people during this unprecedented time. This penalty relief will be automatic for people or businesses who qualify; there’s no need to call.”

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