IRS announces $1 billion in penalty relief for unpaid taxes from pandemic

The Internal Revenue Service on Tuesday announced roughly $1 billion in penalty relief to those owing back taxes from 2020 and 2021, during the height of the COVID-19 pandemic.

The agency estimates the relief will affect roughly 5 million tax returns, filed by 4.7 million people, and amount to an average of $206 in relief per return. Specifically, the IRS is moving to waive failure-to-pay penalties from those years and individuals owing back taxes must still pay their outstanding balances.

The penalty relief, which is automatic, will only apply to those with assessed tax below $100,000.

"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.

"We are taking other steps to help taxpayers with past-due bills, and we have options to help people struggling to pay," he continued.

Penalties will resume April 1, 2024.

Ben Whedon is an editor and reporter for Just the News. Follow him on X, formerly Twitter.