The Internal Revenue Service announced on December 19, 2023 new penalty relief for individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the COVID-19 pandemic.
During the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. Those reminders would have normally been issued as a follow up after the initial notice. Although these reminder notices were suspended, the failure-to-pay penalty continued to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.
This penalty relief is automatic. Eligible taxpayers don't need to take any action to get it. Eligible taxpayers who already paid their full balance will benefit from the relief, too; if a taxpayer already paid failure-to-pay penalties related to their 2020 and 2021 tax years, the IRS will issue a refund or credit the payment toward another outstanding tax liability.
The penalty relief only applies to eligible taxpayers with assessed tax under $100,000. The full announcement may be viewed using the attached link.
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