Automatic Penalty Waiver Announced by IRS

As you have likely already seen or heard, the Tax Cuts and Jobs Act passed December 2017 made many significant changes to various components of individual taxes. These changes included modifications to estimating the liability for the 2018 tax year.

Taxpayers used to withhold or make estimated payments throughout the year that were at least 90% of the current year's tax liability or 100% of the tax on last year's return.

However, in March of 2019, the IRS began to offer relief for this penalty for taxpayers that made payments of at least 80% of the tax liability shown on their 2018 tax return.

Recently, the IRS announced that they would be automatically applying the penalty waiver to eligible returns. Over the next few months, the agency will be mailing CP 21 notices granting relief to impacted taxpayers. Individuals that have already paid the penalty will be issued a refund approximately three weeks after receiving the notification.

Our trusted advisors at Casey Peterson, LTD. stay up-to-date on tax law changes as they happen and proactively update clients of changes that impact them. With this current revision, there is no need to contact the IRS directly

KATELYN WOTEN

Tax and Accounting Associate