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IRS to Refund 1.6 million People Who Missed Tax Deadlines During the Pandemic

Millions of Americans across the country missed key filing deadlines during the pandemic. However, this did not stop the IRS from dishing out hefty fines to the late filers. Luckily, it seems as though the Internal Revenue Service has realized their “wrongdoings” and is going to be sending out refunds to around 1.6 million Americans who were late to file their 2019 and 2020 taxes.

Refunds and Penalty Suspension

Typically, taxpayers who are late to file their tax returns can expect to see a penalty of up to 25% of the amount they need to pay in taxes (Say you owe $1000 that year, you would have to pay an extra $250 on top of that). The agency is now suspending all penalties for those late pandemic filers, with over 1.6 million Americans set to either see a refund or have their existing penalty nullified. The refunds the IRS will be giving out will total out to almost $1.2 billion, an average of around $750 per person. To qualify for this late forgiveness, you will need to have your individual tax returns filed by September 30th, 2022.

How do I receive this refund?

Some more good news is, that taxpayers don’t need to do anything to receive this refund if they have already filed for their individual returns. People who have these outstanding penalties will see that it is erased, and if you have already paid the penalty, you should receive a full refund or credit without having to file any more paperwork or requests. Most of the refunds should be finalized by the end of September, according to the IRS. The effort is to “help struggling taxpayers affected by the COVID-19 pandemic” the agency said. This move can also help the IRS because it will allow them to focus on the mountain of unprocessed tax returns still yet to be completed, in hopes that they can return to somewhat normalcy for the 2023 tax season.

Wrap Up

This move is sure to put some ease on the wallets of millions of struggling Americans that were affected by the pandemic. Hopefully, this can set up a smooth running 2023 tax season for the IRS, which has remained to be seen for quite some time. If you have any tax-related questions on this topic, or anything else, contact one of our tax professionals for assistance.

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