The IRS has seemingly bent over backward this year in light of the significant overhaul to the tax code that applied for the first time. Now it announced that it is automatically waiving the estimated tax penalty to 400,000 eligible taxpayers who filed in 2019 (for 2018) but did not claim the for paying at least 80% of their final tax obligation. Down from the usual 90% without penalty, the agency first announced it would lower the penalty threshold to 85% on January 15 and then to 80% on March 22.
According to IRS Commissioner Chuck Rettig, “The IRS is taking this step to help affected taxpayers. This waiver is designed to provide relief to any person who filed too early to take advantage of the waiver or was unaware of it when they filed.”
Issuing the credit to affected taxpayers
The agency announced that it plans to mail copies of CP 21 notices that grant relief. Those who have already paid the penalty will get a refund within three weeks of the notice, which is issued regardless of whether the taxpayer initially applied. Moreover, no further action need be taken by those who qualify for the waiver. This credit will also apply to those who got six-month extensions and will file by the October 15 deadline.
As is usually the case, the easiest way is to electronically file, which has an automatic waiver computation built into the software. Those who like paper can fill out of Form 2210 and then attach it to their return for 2018.
Does the IRS dispute your numbers?
The agency has been forthright about its waivers, but many still do not see eye to eye with the IRS regarding their tax obligation. Those who disagree with the findings or penalties are advised to contact an attorney who has experience handling tax disputes at the state and federal level. These legal professionals can be invaluable in resolving these matters fair and equitably.