IRS Offers Penalty Relief for Unpaid Taxes, Including Crypto Transactions
If you haven’t paid your taxes for 2020 or 2021, the IRS has announced that it will waive its standard “failure to pay” penalty for over 4.7 million tax filers who haven’t paid their taxes. This penalty relief will save taxpayers a collective $1 billion. This means that if you have failed to report your crypto transactions from those years, you can now pay taxes on those gains without owing late fees.
Who’s Eligible for the Savings?
The penalty relief applies to individuals who made under $100,000 in 2020 or 2021, although some with higher incomes may also be included. The relief only extends to taxpayers with assessed tax under $100,000.
The IRS has dropped the failure to pay penalty for the 2020 and 2021 tax years.
What is the failure to pay penalty, and how does this apply to you? Thread below! 🧵
— Crypto Tax Girl (@CryptoTaxGirl) January 10, 2024
Automatic Penalty Relief and Refunds
Starting this month, eligible taxpayers will receive letters from the IRS informing them of their inclusion in the program. The penalty relief will be automatic, and those who have already paid late penalties will be refunded in full. However, this opportunity is time-limited. The program will only last until the end of March, after which the IRS’ monthly late fee will be reinstated for all taxpayers.
Reason Behind the Waiver
The late fee waiver is a response to the IRS’ decision to stop sending reminders about overdue tax bills during the height of the COVID-19 pandemic while still charging late fees. The waiver aims to address the potential unfairness of this situation.
Crypto Usage and Income Levels
A survey by the Federal Reserve found that over 12% of Americans used or traded cryptocurrency by 2021. More than half of those individuals made less than $100,000.
Hot Take: IRS Offers Penalty Relief for Unpaid Taxes, Including Crypto Transactions
The IRS has announced penalty relief for over 4.7 million tax filers who haven’t paid their taxes for 2020 or 2021. This relief includes individuals who have yet to report their crypto transactions from those years. Eligible taxpayers can now pay taxes on their gains without owing late fees. However, this opportunity is time-limited, with the program ending in March. The waiver addresses the previous lack of reminders about overdue tax bills during the pandemic. This move provides relief for many crypto users and aims to rectify potential unfairness in penalty charges.
By
By
By
By
By