New IRS Alert Means Surprise Refunds for Many Americans—Will You Get One?
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Typically speaking, using the words “surprise” and “IRS” together wouldn’t evoke the most positive emotions in people. Many might assume that a message from the agency out of the blue means they’re getting audited or have to pay a hefty fine for underpayment . With 2023 filings due in April, most taxpayers are likely hopeful they’ll be able to get everything in without hearing a thing from the agency. But now, some might be shocked to learn about the latest alert from the IRS that could mean surprise refunds for many Americans.
RELATED: IRS Warns That Claiming These Credits Can Get You Audited and Fined .
In a press release on Dec. 19, the IRS announced it would provide relief for about 4.7 million taxpayers , businesses, and organizations that owe back taxes. In all, the agency said it would be providing roughly $1 billion in penalty relief, mainly for those making under $400,000 a year.
The IRS explained that it had stopped sending out automated follow-up collection notices in the mail in February 2022 due to the effects of the COVID-19 pandemic on its operations. However, the agency said that those who weren’t notified still accrued failure-to-pay penalties despite not being informed.
“As the IRS has been preparing to return to normal collection mailings, we have been concerned about taxpayers who haven’t heard from us in a while suddenly getting a larger tax bill. The IRS should be looking out for taxpayers, and this penalty relief is a common-sense approach to help people in this situation,” IRS Commissioner Danny Werfel said in a statement. “We are taking other steps to help taxpayers with past due bills, and we have options to help people struggling to pay.”
The relief will apply to individuals, businesses, and other organizations that filled out Forms 1040, 1120, 1041, and 990-T income tax returns for the 2020 and 2021 tax years for those who owe less than $100,000. The agency said that the earmarked amount averages out to about $206 per return and that they will notify those who are eligible by mail starting next month.
According to the IRS, recipients will see the penalty relief automatically applied to their balance. Taxpayers who already finished paying off back taxes from those years with a failure-to-pay penalty will also still receive a credit towards another outstanding bill. However, the agency specified that it could not legally waive any interest incurred on late payments due.
The IRS added that penalties on the funds will resume again on April 1 of next year. It also laid out ways that people struggling with financial burdens could get things under control.
“The IRS wants to help taxpayers and provide them easy options to deal with unpaid tax bills and avoid additional interest and penalties,” Werfel said in the statement. “People receiving these notices should remember that there are frequently overlooked options that can help them set up an automatic payment plan or catch up with their tax filings.”
- Source: IRS: IRS helps taxpayers by providing penalty relief on nearly 5 million 2020 and 2021 tax returns; restart of collection notices in 2024 marks end of pandemic-related pause
IRS Announces Major Tax Filing Changes for Next Year—How You Can Benefit
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Filing your taxes may be the one thing you count on doing every year, but it might not always be the same process. Even when you haven’t had a major life change such as getting married or starting a new job, the Internal Revenue Service (IRS) still makes adjustments to the process that can affect how you submit your paperwork. In fact, those who are already getting everything in order ahead of the deadline might want to take note after the IRS announced a major set of tax filing changes for next year. Read on to see how you can benefit from the latest update.
RELATED: IRS Warns That Claiming These Credits Can Get You Audited and Fined .
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While plenty of people choose to file their taxes online , the process can still involve a decent amount of physical paperwork for some who require extra forms or documentation . But if you’ve had to rely on the postal service to get everything in on time in the past, you can breathe a sigh of relief.
In a Nov. 7 press release, the IRS announced that it had reached its goal of implementing the Paperless Processing Initiative three months ahead of schedule. The program, which was announced in August, makes it possible for taxpayers to submit all correspondence and responses to notices using a Document Upload Tool on the agency’s website.
The new service provides another significant upgrade from the latest changes released last February, which made the nine most common correspondences available for digital reply, Yahoo Finance reports. The prior system relied entirely on using physical mail to conduct business.
Not only will the new system cut processing time in half, but the agency also says the program will help save over 200 million pieces of paper each year. And while the IRS estimates that 94 percent of individual taxpayers will no longer need to use the mail, those who choose to file through the post will still be able to if they choose to do so.
RELATED: IRS Issues New Alert on What You Must Do Before the Year Is Over .
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If there’s any silver lining to paying your taxes, it’s getting a refund down the line. Now, those who are anxious to see some of their cash come back can get a better idea of when it’s coming thanks to the agency’s newly improved Where’s My Refund tool.
According to the IRS announcement, taxpayers will be able to use the online feature to check the precise status of their refund, as well as find out if they need to respond to an agency request for more information. Previously, the tool provided a generic message that didn’t offer any specific information about a person’s filing.
The tool has seen plenty of use in the past, with about 54 million taxpayers using it to generate 550 million hits in 2022, per the IRS. The agency says the detailed updates will likely reduce the number of phone calls made to the IRS for refund status inquiries.
RELATED: 4 Warnings About Using TurboTax, According to Experts .
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When you’re looking for a quick answer to your questions while preparing your taxes, nothing beats the efficiency of a phone call. This year, the agency says it is continuing with improvements it’s made to its phone service to make the service even more accessible.
The agency says it plans to reach at least an 85 percent level of service once again during the 2024 filing season, carrying over improvements made to the system during last year’s filing brought about by hiring a stable of new representatives, per the press release. The IRS will also aim to have an average wait time of five minutes or less and offer a call-back option if the projected wait time is longer than 15 minutes.
RELATED: If You Already Did Your Taxes, You May Need to File an Amended Return, IRS Warns .
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Those who want some in-person help will also see some improvements. The agency says it is opening or has reopened 50 Taxpayer Assistance Centers nationwide and will be increasing the number of available hours for assistance by more than 8,500 hours. The complete list of locations and reopening dates can be found in the press release.
The IRS also says it will be rolling out more pop-up centers and aims to increase the number of taxpayers receiving free in-person preparation assistance by 50,000 returns. All told, some experts think the updates could help smooth out what can be a notoriously tricky and confusing process.
“I think these changes are good news,” Grant Dougherty , enrolled agent and founder of Dougherty Tax Solutions, told Yahoo Finance. “Anytime the taxpayer experience can be improved, I think it’s always a win for everyone involved. I do believe the [2024 filing season] will be a little smoother.”
